RUSSEL ETF 20% profit play during correction with Iron Condor
Updated
One of the most highest probability of trades are: neutral Iron Condors with high Implied Volatility on large indices. (SPX, DJI, RUT)
The more an indice is overbougth, than better this strategy works, as the correction also results more movement into downside.
Unlike other overvalued stocks, however: the indices are not collapsing. (except for 1-2 extreme cases where immediate intervention is required, eg March 2020)
I'm always trading the alternative ETFs of these indices:
- SPY = S&P500 = ES mini futures
- IWM = Russel 2000 = RT mini futures
- DIA = DJI = YM mini futures
- .etc...
On Friday I've opened an IWM Iron Condor, so here are my reasons:
(1) RTY1! Futures Analysis
The Russel mini futures at local top hit the 3 year trendline, bluffy upside trendline permanently broke.
(2) Divergence with breakdown
Hard daily divergence in the last few months, my smooth RSI trendline breeaks.
(3) Relative high IVR
Relative Implied Volatility Rank (IVR) increases.
This value, if high enough (e.g., above 45), favors neutral credit strategies like Iron Condor.
In the case of indices, this is particularly rare, occurring every few months. At these times you can safely open neutral strategies (wide wings), for example: Iron Condor, Strangle.
(4) My Iron Condor hunter script signal
My Iron Condor Hunter indicator give me an automatic signal with safe ranges.
As you see: in the past almost every time indicated the safe range successfully. (I'm not counting the 2020 Marc, every regular strategy failed in that crash).
(5) Safe levels are well defined in my range
I'm always defining safe price levels (based on the nearest short term high/low points).
In my case these levels are well defined inside the Iron Condor Hunter range:
CONCLUSION: I've opened an Iron Condor on IWM (Russel ETF)
- Profit target: 20%
- Max profit: 68$
- Max loss: 332$
- Tasty IVR: 13
- POP: 69%
- Expiry: 42 days
Strategy: Neutral IC
- Buy 1 IWM April16' 185 Put
- Sell 1 IWM April16' 189 Put
- Sell 1 IWM April16' 244 Call
- Buy 1 IWM April16' 248 Call
Stop: Closing immediately if daily candle is closing below put strikes or above call strikes. Safe levels (190,205,229) are defending my borders.
Take profit strategy: I'm taking at the 55% of max.profit in this case. Inside the curve I'm usually in profit.
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Trade closed: target reached
Closed today az 50% of max profit 0.34 db.34$ (50% of max) profit collected in 10days.
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✔ IVRank ✔ CALL/PUT skew ✔ Volatility Skew ✔ Delta curves
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REAL Options metrics for over 165+ liquid US symbols:
✔ 𝗔𝘂𝘁𝗼-𝗨𝗽𝗱𝗮𝘁𝗶𝗻𝗴 𝗚𝗘𝗫 𝗹𝗲𝘃𝗲𝗹𝘀
✔ IVRank ✔ CALL/PUT skew ✔ Volatility Skew ✔ Delta curves
👉 7-day TRIAL 🌐 TanukiTrade.com
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