High-Probability Income Trade on the $SPX

During the Advanced Trading Class aired on 11/20/2015 we executed a high-probability income trade on the S&P 500 index going into the short Thanksgiving holiday week. After performing a thorough technical analysis on the S&P’s we designed this trade with a 75% probability of staying between the 2130 – 2060 trading range. See the technical chart break-down along with current option chain insights for more insight:

SPX_chart_11_20-trade SPX_option-chain_11-20

Filled order book: Three separate trading strategies embedded on this neutral SPX income trade to create the desired risk profile.

SPX_high-prob_11-20_entry

Trade Date: 11/20/2015
Stock Price: $2091
Strategy: Long OTM Double Calendar Spread & Short OTM Iron Condor
Strike Price: 2075 put calendar | 2115 call calendar | IC = 2130/2140 calls & 2050/2040 puts
Expiration: DEC1 & DEC2
Net Debit: 4.70 (x) 3  [+] 3.60 (x) 5  = $3,210
Net Credit: 4.35 (x) 3 = $1,305
BP Effect: $3,000
Max Loss: $1,695 + $3,210 = $4,905
Max Profit: $4,000 (per risk profile below)
Trade Risk: $1,500
Profit Target: $1000
Risk-Reward:  2:3
Time Frame: 1-2 Weeks
Risk Profile: See snapshot below for detailed position statement and overview

$SPX_high-prob-trade-riskprofile

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