SPX 5-dte

#SPX5dte After weeks of success I screwed up pretty badly today on this long condor. After missing the chance to exit on the big swings during Powell’s speech, I felt the action was bullish so wanted to exit the put spreads first. I did for 4.00 as it started down, but then it dropped WAY down. Now it looks like no bounce will come, or at least not one big enough to make the 4165/4185 call side profitable enough.

My recent strategy has been going well, using #SPX1dte as a base and then throwing in a long condor about once per week. However, I’m wary that the long strategy is inherently more risky. The best bet is to try to exit before expiration day, and indeed, today is the first week in awhile where I waited for expiration day. I did that because the week was pretty flat, giving me no obvious swings with which to exit.

During Powell’s speech, when we dropped, I set an order to sell the put spreads at 8.00. We had just hit about 8.50 so was trying to pick a bottom. Turns out I did pick it, but set my order a few seconds too late as the bounce began. Then we bounced way up and could have exited for 13.00 or more. That would have ended my day. But alas, now I’m pretty much screwed.

I don’t like relying on a strategy that is that fragile. The loss I’ll take today, as much as 13.75, is made up by the last few weeks of profit on this 5-dte trade, but it is a shame that my overall progress takes a big step back. So what I’ve determined is that I need to take a loss on the day before expiration if the SPX is still near the center of my condor. Typically, that would result in a 1.00 to 3.00 loss, which is completely acceptable. Going into expiration day could mean a big win, but only if you play the swings exactly right. So that risk of big loss is too great to risk.