jr1221

Been watching your trade on this. It's in an interesting spot, having dropped a lot today on fairly low volume and hitting an area of strong support. If that support holds, you may get that major short rally you've been waiting for. Do they have upcoming earnings announcement?

It sounds like Chris BOUGHT an Iron Condor, so received a credit. Had he SOLD it, it would have been an RIC and resulted in a debit.

I do love charting my combos but I also wish I understood those bars better.

The education has been very valuable. I never paid attention to greeks prior to joining, and now I can't imagine how I ever expected to be a profitable trader without them, especially using them to keep a portfolio properly balanced. And the lessons on position sizing and risk management have significantly helped my other trading accounts which use directional strategies. I think this forum will improve significantly as we diversify, allowing us to be pickier in selecting earnings trades, and passing on the ones where fills have become an issue. Keep it up Kim!

I would only be doing this trade between FOMC meetings, but not during one. GLD always moves a lot based on whether the word "QE" comes up in the FOMC minutes.

Kim, have you spoken to IB about whether they have any flexibility on rates for our members? We account for a lot of volume although I'm sure they know they are already the cheapest game in town. But their poor customer service and occasional software quirks could offer us a little leverage?

I've studied this method quite a bit and the flaw is that it assumes the underlying won't move much. As mentioned above, if the underlying moves down, you can do pretty well. but if it moves up, you can't continue to collect the amount of premium you originally planned for unless you alter your strikes. And if you don't move the long strikes along with the short strikes, you have to use some margin and of course some risk that you wouldn't want on a retirement portfolio. Sure you can move the long puts as well but I could see the management of this being commission consuming and frustrating if you keep getting caught up in the normal fluctuations of the market. I'd love to find a great way to protect the retirement portfolio but would need some help with structuring the trading plan for it. I also considered a method like this to protect my GLD LEAPS but, the way GLD moves unpredictably each time Bernanke speaks, it's hard to manage the trade without potentially locking yourself out of the originally intended gains you planned for.

One thing that wasn't really addressed above...I think there was a subscriber who wondered if he should just close the position today, instead of waiting until tomorrow (last day to sell prior to earnings). If I'm in a trade that's 10% down, I see no reason whatsoever to sell it a day early. The last day is one of the most likely ones that the IV increase will exceed theta. So there's a decent chance you'll gain much of that loss back. And even if you don't, you're not likely to lose more than another 1-2%, which is a risk worth taking. I really sleep well with this trading strategy, because I: 1) don't care which way the market goes the next day, I simply hope it goes big even though that's not always necessary either, and 2) I know I'll never wake up in the morning and log into my IB account and find a position that lost 60% overnight, which is what I saw way too often with my previous directional trading strategy. It sucks when these trades go against us but the losses aren't the type that should stir any panic, including selling before the final IV push begins on the last day before earnings.

Sorry if I seem stupid with the confusion...but right now we have an open trade in this forum for GOOG...we create an IC and we sell it, which to me means we are doing an RIC (selling a short, which is net a debit). So if you create an IC on VXX and you sell it (i.e. for your .43 net debit), isn't that by definition an RIC?

it has dropped almost a dime since Kim got in, so you all have a chance to get an even better price than he did. he's spotting all of you a head start! :-)

so playing an IC, you're expecting VXX to have little movement for at least 2-3 days next week? I mistakenly thought you frequently play weekly RIC's on VXX when you are able to play consecutive strikes (was it you who said he likes to play this trade as long as it costs less than .70 to enter?)?