Russell 2000 Iron Condor – Slightly Neutral, Slightly Bearish – CLOSED for 20% ROI

10/20/21 – This mildly bearish IWM iron condor just hit 50% of premium received and made over 20% ROI. To close the trade:

  • Sell to Close the Nov 19 193 Put
  • Buy to Close the Nov 19 198 Put
  • Buy to Close the Nov 19 234 Call
  • Sell to Close the Nov 19 239 Call

– Jerry

What’s the trade?  

The Russell 2000 (IWM) has been in a range since Feb of this year. I’m thinking it will continue between 211 and 229, or breaks down slightly. This mildly bearish 5$ wide Iron Condor expiring in 50 days is a low risk way to play this. The stochastic is rolling over, the RSI is bearish, and the IVR (Implied Volatility Rank) is over 30. IWM has a .74 correlation with the SPY.

Russell 2000 Iron Condor

With IWM trading at 218 on 9/30

  • Buy the Nov 19th 193 Put
  • Sell the Nov 19th 198 Put
  • Sell the Nov 19th 234 Call
  • Buy the Nov 19th 239 Call
  • Premium: Try to collect around $166
  • Rationale: This is a defined risk trade with a max loss of around $334 and a max profit of around $166. With IWM trading between 211and 229 for most of the year and a decent IV Rank of 32%, this may be a good time to enter this bearish leaning Iron Condor. The plan is to exit once we hit 50% of the premium received, well before the 50 days are up.
  • Probability of making 83$: 77%
  • Assumption: Neutral to Bearish
  • Timeframe: 2 to 4 weeks.
Russell 2000 Chart - Sept 2021

Leave a Comment