Note to new readers: This is a regular update on the status of our XJO Iron Condor (Mark III) Model Portfolio. Please read the Trading Plan first in order to understand the objectives and the rules for trading this model portfolio.
Our April 2016 iron condor was another very comfortable winning trade. We opened the trade on 4 March with 48 DTE when XJO was trading around 5080. XVI was at 18.64 giving us an IV Rank of 33%. IV had fallen after the big rally the week before but as our April trade had a slightly longer duration, we still managed to get a decent premium of 48 points and a 638 point wide iron condor. The market continued to rally for another week but stalled when the price reached the 200 day MA and traded sideways after that as shown in the chart below. IV continued to fall so our April trade was in profit for almost the whole duration of the trade. Our GTC order to take profit at 50% was triggered on 23 March 2016, 19 days after we opened the trade.
We track our monthly performance without including brokerage cost as this will vary from broker to broker. Our performance as of April 2016 is a total profit of $6550 or a 33% return on our trading capital of $20,000 for this model portfolio.
As I write this update, the IV Rank has fallen to 15% which is below the minimum IV Rank of 30% needed for opening a new trade according to our Trading Plan. If IV Rank goes back above 30%, we will put on our May trade after the next RBA meeting which will be held on 5 April 2016. I will provide another update on this model portfolio after the May trade is closed.
Disclaimer: This post is for educational purposes only and should not be treated as investment advice. This strategy would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek investment advice if required.