Jeff 5:31 am on Wednesday, February 14, 2024
Tags: IronButterfly ( 141 ), SPXodte ( 2 )

SPX 0dte 2/14/24

#SPXodte Sold to Open $SPX 4945/4975/5005 #IronButterfly for 17.15, IV 19.4%

Small accounts: Sold 4945/4975-4980/5010 condors for 15.25

Hawk 5:40 am on Wednesday, February 14, 2024

the wings for IB and IC are both 30 wide, I would imagine the margin would be about the same. why would IC provide advantage for a small account?
- Jeff 6:19 am on Wednesday, February 14, 2024
  
  Accounts under $25K are subject to Pattern Day Trading restrictions. These trades are opened and closed in the same day, so one trade in such an account would restrict the account from future trades. An IB has four options, so closing it would count as 4 day trades, which is over the weekly limit.
  
  With a Condor, you can open a neutralizing position by selling the same strikes in the opposite side. So to close a 4980/5010 short call spread, you can sell a 5010/4980 put spread. That uses DIFFERENT options so is not considered a day trade.
  
  You can’t do that with an IB, since they share the same center strike. It’s confusing and hard to explain, but if you need further explanation let me know and I can be more explanatory in my closing trade today.
  - Hawk 7:43 am on Wednesday, February 14, 2024
    
    Thanks for the explanation. it’s not confusing, and makes sense how you manage the closing in that situation. I just didn’t think about that small an account and pattern day trading.
Jeff 6:59 am on Wednesday, February 14, 2024

Today, with volatility higher after yesterday’s swings, I got no benefit from selling an hour before market. Could have gotten same or slightly better price by waiting for the open, without risk of pre-market moves.
- Jeff 7:44 am on Wednesday, February 14, 2024
  
  10% profit taken on the IC, closed for 13.65.
  
  I am beginning to think the 5-wide condor may be a better trade than the IB, but more time will tell.
  - Jeff 8:02 am on Wednesday, February 14, 2024
    
    Interesting that IV is not dropping; it has been over 19% since before the open. This prevented the IB from reaching 10% even as SPX hovered at the mid-price 90 minutes after open. There is nothing on calendar I see. Is there something traders are waiting for today?
    
    EDIT: as I wrote this and market dropped 10 points, IV went up to 22%.
    - matt0311 8:19 am on Wednesday, February 14, 2024
      
      I saw this as well. Similar to yesterday: closed both for small profits before the bigger drops started. If the volatility (or the expected move which are indicating the same) does not decay, I believe one must be willing to close at the first best chance, sometimes foregoing the full targets.
      - Jeff 9:05 am on Wednesday, February 14, 2024
        
        This is true, but I’m dumb
        
        matt0311 10:18 am on Wednesday, February 14, 2024
        
        yea right. don’t you believe I trade according to this plan every time. Best of Luck!
    - Jeff 8:46 am on Wednesday, February 14, 2024
      
      10% target hit at 8:35… waiting for more profit now.
      - Jeff 9:35 am on Wednesday, February 14, 2024
        
        Closed IB for 14.50, so 15.5% of max profit. Flat for today
- Hawk 8:27 am on Wednesday, February 14, 2024
  
  I generally give it 15 min after the open before selling IB, unless the premarket is so telling.

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