TRADE IDEA: QQQ AUG 18TH 127/130/145/147 IRON CONDOR



The Q’s have the highest implied volatility rank among the four major index exchange traded funds. That being said, I generally look to bring in one-third the width of the widest wing with these with the short options set up at the 20 delta, and I’m not getting that here, so it’s less than ideal … . The metrics:

Probability of Profit: 62%
Max Profit: $69/contract
Max Loss/Buying Power Effect: $231/contract
Break Evens: 129.31/145.69
Theta: .82
Delta: -1.78

Notes: Look to manage at 50% max. For an undefined risk alternative, go with the 130/145 short strangle, which pays 1.86 at the mid and has a probability of profit of 68%, BE’s at 128.14/146.86, theta of 3.84, and a delta of 1.89.

Source: StockSetups