Hello,
I want to bring to your attention the following issue, I set up an iron condor on SmallCap 14hours ago, after about 1h I saw profit $8 than after 4h it went to -$8 loss. 20 mins ago the profit was $18 and suddenly it dropped again. It bothers me cos the price is not moving since I set up the IC so whats going on?
Ok I have no idea what actually happened but have a look now same contracts:
Thanks
Stanz80,
Not sure which price you are talking about. If you are talking about the average price it will not move at all because that is the price you paid for each spread. The market price (spread price) is what will move. The speed at which it moves will depend upon how much time is left until expiration, how close to the middle of the spread the price is, and how fast the market is moving. Looks like the market was pretty calm in this example.
Looks like the spread price moved 30 ticks on one side and 21 ticks on the other. Both in your direction. Looks like the indicative was at or close to 1170 when you bought the spreads. If it expired there you would make max profit on both sides.
So what happened from the first screenshot to the second was that some time had passed and since the market only moved one point both sides of your iron condor continued to increase in profit. Essentially time happened, the market didn’t move much, and your profit increased as a result.
As you’ve seen by my posts, IC’s are my favorite to trade. Looks like max profit on this trade was 83 on the lower spread and 88 on the upper spread. Curious how this trade ended for you. Did you take profit or let it ride longer?
Hope this helps.