ETF Option Trades

Actual 2008 Trade Alerts emailed and posted to the Members Page:

Example #1: Iron Condor Trade

6/15/2008 Trade: (Filled 6/16/2008) This July IWM 62/64 - 80/82  Iron Condor currently has a bid/ask of .10/.27. My limit amount for this order will be .15 cents which is 3.5 cents less than the midpoint ( (.10+.27) / 2 = .185). The return for this trade is 8.1% as follows:

• Margin Required for each contract of this trade = $200 - $15= $185
• Return - Total Credit / Margin Required = $15 / $185 = 8.1%
• We will exit either side of this trade if the IWM rises to 77, or drops to 67, which is 3 points away.

This is a screen capture of an OptionsHouse order ticket taken on March 30, 2008.

Legs 1 & 2 is called the Bull Put spread and a Bear Call spread for legs 2 & 3.

So, a total of 4 options legs is required. We enter a Limit Sell (receiving credit) for a little above the market value for a better entry and select "all or none" because we need to be sure to get filled the same amount of contracts in each leg.