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Let’s take a look at our put position. We’re way down here. We’re at 122, 124. We have maybe… We’re short these, so we would have to buy these back at 22. We’d have to sell those out at 14. That’s only 7 cents. It makes sense to roll those up as well. Maybe we can get some more credit by rolling them up to the 130s, and get a 20 or 30 cent credit on that.
That would also help the profitability of our position. If we got up to around 130, that would be nice.
We got the put spread on. Add about a 30-cent credit. Let’s analyze this. We’ll create a closing order for these. We can actually take them off for maybe 7 or 8 cents, here. Let’s see. We made about 20 cents on that, and then we can roll these up.
Let’s go up to the 132s, and see what we can do. We’ll sell a vertical there. Let’s see what this does to our position.
We’re only going to get a 14 cent credit on that. Let me move my put down a little bit. We’re getting another 26 cent credit. It’s not too bad. If we can make another 20 cents on that… Let’s take a look at this duplicate trade.
We’re going to be taking these off. We’re going to be adding this other position. What does that do?
We’ll take a look at our picture. If the picture looks good, then we’re going to be in a profitable position here. If we take off that 20 cents, we’re going to make about a $100 profit. If we put on another position, you can see that we’re not going to have that $100 profit anymore. We have about a $100 profit now. $86. It puts us in a position to earn another 80 in credit.
All we have to do is roll that up to the 132, 130 vertical short spread. That just brings up our breakeven on the downside. Before, it was way down there. Our breakeven was around 123. If we put this position on and we take off the one that we have, for a profit, it moves up our breakeven, to about 131.
Which is fine. Let’s take a quick look at the chart. 131 on the SPY is going to be way down here. We’re way up here. Unless we’re in a real bear market here, and prices totally collapse on us – which could happen. Then we will make a profit on the roll that we just made, on the upside, and we will roll down. If we hit the breakeven on the bottom side, we’ll do the same thing that we just did, on the call side.
We were hitting up against that upper-level breakeven, on the upside, and we just rolled it up for another credit. We could do the same thing on the downside. We take a little profit, at the same time.
Commissions are always an issue. That’s why I wouldn’t sell this for less than 8 cents, because we did put it on for 28 cents. We have 20 cents in there. That’s about a $100 profit, on 5 positions. We’re rolling it up for another 27 cents, or maybe 26 cents, if we hit the mid-price.
If we take another 20 cents, we can make another $100 off of that. It’s about 15 in commissions, so we do give up a little profit, but we are in a profitable position. We’re not talking about being in a position that we are not making money. We are making money. We’re taking in credits, and we’re selling positions back, in a profitable position.
It’s not a bad position to be in. We got filled right away on those. That’s one thing I like about the SPY – you get filled very quickly on those.
Let’s take a look at our position now. We’re back into a position where we’re right in the middle again. We’re right at 138.53. We’re pretty good. Our breakeven is 144 on the upside, which is resistance level. Our breakeven is 131 on the downside. We’re back in the middle. We’re not hurting on either way.
We rolled it out for a credit, on the upside. We took our profits on the downside and moved up for another 20 cent credit, if we don’t hit that downside, so we’re in pretty good shape. That’s how you adjust your iron condors, at least. If you hit those breakevens, just roll those credits up, as long as you can do it, so you don’t get killed on those.
Let’s say you sell those for 40 cents originally, and you have lost maybe 40 cents on that. You can roll it up for another 40 cents. It’s a breakeven position. You’ve extended your breakeven on the entire position even more. Why not do it? It’s a good opportunity. It has not hurt our profitability on the overall position at all.
If you take a look down here, at the green expiration profitability graph, we’re still at $370, which is very close to what we initially put the position on for. We’re open to get at least 50% on that, or about $180, going toward the close, over the next couple of weeks.
That’s how you manage trades. You adjust as necessary. You don’t have to get hurt, and you don’t have to take losses. As you can see, we did not take a loss. In fact, we took a little bit of profit out of the position. It was right up against our breakeven on the upside.
We rolled up for an additional credit, we took our profits on the low side, and rolled up for even more credit. That’s how you adjust these positions. You do not have to get hurt in the market, if you know what to do. So, go out there, and trade with confidence.