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