New position for March 2010

Written on Mar 16, 2010 // Options Trading.

This is it.

I’ve been paper trading up until now. Today is my first day using real money! This is for real.

I was going to buy a Double Calendar, but IWM and EEM had negative skews. So I sold an Iron Condor on the SPY.
I’m almost a full point above center, because I’m betting on the market being bearish soon. I sold CALLS and PUTS for at least $1, going as far OTM as possible. Looks like the market is predicting a bearish fall, because my graph is optimal when I sell puts further OTM. Current price is 114.96, and my breakevens are at 110.08 and 117.92. I’d prefer the breakevens to be a little wider, but at least the downside breakeven is close to 5 points lower than current price. If SPY goes up, I’m only 3 points from my breakeven, so I will watch this carefully.
I used half of my option power (was $5000, now $2378), hopefully leaving enough money for adjustments.
The SPY is my only position this month, because negative skews kept me from buying double calendars.

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