Option FanaticOptions, stock, futures, and system trading, backtesting, money management, and much more!

Paper Trade 1 (Week 1) (Part 1)

I apologize for the generic title of this blog post! This corresponds to a RUT weekly iron butterfly trade.

The trading plan is as follows:

–Place trade on Tues-Thurs when Avg IV spikes roughly 2% or more
–Sell 30-point call credit spread ATM
–Sell 40-point put credit spread ATM
–Close trade if profit reaches 10%
–Close trade if loss reaches 15%

I will include transaction fees of $11/contract.

On 7/31/14, I sold 10*1150/1120/1120/1080 IBFs. MR is $18,730. Credit received was $21.71.

For T+1, max loss points (-$2800) are roughly 1098 and 1143.

I will monitor this way every day to see if max loss points are hit.

Comments (5)

Old Grantonian says:

Hi Mark,

I stumbled across your blog by accident. I’m working my way through from the beginning. There are a number of broken links. For example, on the following page: http://www.optionfanatic.com/page/22/

The link at the top of the page, referring to “consecutive-directional-close-part-1/”, is broken.

Do you want me to report the broken links in a comment? Some of these are from 2012, and I’m not sure if you still monitor old comments.

I notice that your last post was in August 2014. Is your blog dead?

Mark says:

That link has been fixed. I think at some point I changed the titles of some blog posts and I forgot to edit the links. If you see others then I’ll fix those too.

Today, this blog lives. 🙂

[…] Avg IV spiked about 1.8%. Being a Thursday, this meets the criteria defined here for a weekly IBF […]

[…] on a second consecutive 10-point down day. This is not the magnitude for a 1-day volatility spike I originally described as a criterion for taking the […]

Leave a Reply to » Paper Trade 1 (Week 3) (Part 1) Option Fanatic Cancel reply

Your email address will not be published. Required fields are marked *