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I’m not a big fan of adjustments to existing condors, but given the straight, six-day rise in $SPY, I think now is a good time to take preventative measures as technicals point to a potential breakout for the index.
In brief, I’m rolling the call side of this long iron condor from 106/109 to 109/112, taking a net debit of $1.06 on the former and net credit of $0.53 on the latter. This leads to a near-term loss of 5% but overall gain of 17%.
I still look to hold this position through the end of September, at which point I’ll tighten my stop losses considerably in order to lock in gains. My only stop loss, at the moment, is to buy back the sold puts at 101, at which point I plan to earn extra income in the (very) short term by delaying the sale of the purchased puts for this condor.
As you can see from this chart, we’re approaching the same price level as the bottom of the October 2008 gap in the S&P 500. Technically speaking, this is the last significant near-term resistance level for the index before “clear blue skies” up above.
One of two outcomes will occur: