Besides the fact that I like to trade delta neutral on the indexes, I entered an iron condor position in the Russell 2000 (RUT) index today for a couple of other reasons.
- Implied volatility (IV) is high relatively high
- Put skew is slightly above the 2-year mean
See my posts in the Options Education section if you’d like to learn more about iron condors, implied volatility, and skew.
RUT Sep 12 680/690/845/855 Iron Condor @ $215 per spread
Profit target: ($215 * 0.8) = $172 per spread
Target return on risk (ROR): ($172/$785) = 21.91%
I included a daily price chart of RUT for reference (click to enlarge):
- Quick Take On The Markets & Watchlist
- Markets Keep Exploding And Options Watchlist
- Reader Question: Butterflies and Implied Volatility Skew
- What Led The Market This Week? (And Watchlist)
- Defensive Sectors Leading The Market & Watchlist
- Breaking Down This Week’s Winners & Watchlist For Next Week
- What Sectors Are Leading The Market?
- Market Strength and My Watchlist
- Implied Volatility Skew and What It Tells Us
- An Interesting Take on Selling Implied Volatility Here