Tuesday, March 20, 2012

$FXE iron condor w/43% reward/risk

My last $FXE iron condor was a 100% profit trade. Meaning my iron condor expired for full profit (see earlier blog I already posted).
Now I think I can do it again with this trade:
Sell Iron Condor 128/126 - 134/136. The upper leg is closer than my usual buffer but fxe has failed to break out several times and i don't see any change in Eurozone to change it in april.
I should be able to take in $.58 and I will do it 10x so collect credit of $580.
1) FXE stays between 128 and 134 by 4/20 and I get to keep the entire 580 amount
2) FXE runs up and breaches my upper short call leg. Then I would have to either close it for a loss or adjust it. More than likely I will be able to easily adjust it so not to take a loss.
3) FXE drops below my lower short put leg of 128. Here too I will have to adjust.
* Probability of maximum profit is 60%
 - Probability of the 128/26 credit put spread alone expiring for max profit is 88%
 - Probablity of the 134/36 credit call spread alone expiring for max profit is 69%
* Reward (.58 premium i collect) ratio to risk is .43 (risking 1 to make .43... risk i am willing to take all day).
I have the order saved and will likely pull the trigger today. I ONLY RISK MONEY I AM WILLING TO LOSE. THIS IS NOT A RECOMMENDATION OF ANY KIND. Thank you for the read. If you like this follow me on twitter @racernic (also on stocktwits).