Possible CME Adjustment

by Jeff on August 23, 2010

I have an Iron Condor currently open on CME. Price has been steadily moving down on this stock and I decided that I wanted to prepare for a possible adjustment. Rather than type the whole thing out, I made it easier on myself and produced a quick 7 minute video for you to watch and critique. You’ll find it under “New Downloads” on the far right column and it’s called CME Iron Condor Adjustment.

Oh, and although I didn’t say this in the video, this same technique can be used to adjust Credit Spreads too – you just do one side and not both like you would on an Iron Condor.

Enjoy.

◄ Jeff ►

I have an Iron Condor currently open on CME. Price has been steadily moving down on this stock and I decided that I wanted to prepare for a possible adjustment. Rather than type the whole thing out, I made it easier on myself and produced a quick 7 minute video for you to watch and critique. You’ll find it under “New Downloads” on the far right column and it’s called CME Iron Condor Adjustment.

Oh, and although I didn’t say this in the video, this same technique can be used to adjust Credit Spreads too – you just do one side and not both like you would on an Iron Condor.

Enjoy.

◄ Jeff ►

Tagged as: Adjustments, bear call spread, bull put spread, Iron Condor

  • http://theoptionguru.com/blog Jeff W
  • Matt

    Jeff,nThank you for your reply. I have enjoyed watching the preview (free videos) that you can get to from their web site and wondered if the product was legit. Reading your reply (and soon to be post) it sounds like it is. I appreciate you taking the time to share your opinion about the system with me. nMatt

  • Hbmg144

    You mentioned in a video a website or trading package ” Trading as a Business,” which you found extremely helpful. Googling it brings up a lot different websites, could you tell me the actual website. Thanks.

  • http://theoptionguru.com/blog Jeff W

    ML,nn1) Absolutely! Trading Pro System has given me the knowledge and the tool to be profitable (so far) 8 out of the 10 months since I have been using David’s techniques – and up almost 30% YTD. Check out my Closed 2010 tab at the top of the blog.n2) I am trading live. Check out the video I just posted. The methodology I developed has been used twice in my account since I made the video. The bottom line is +$376 for this month. If this week works out, you can add another +$400 (or better) to the bottom line, and that will complete August. Note also that I have started to apply the same strategy to IWM.nnu25c4 Jeff u25ban

  • http://theoptionguru.com/blog Jeff W

    Martin,nnI know of a few people that have purchased the rights to this material and re-marketed it under a different name. The ones I have been able to identify charge more for the product that then original author (David Vallieres) does.nnI hope you have found it as beneficial as I have.nnu25c4 Jeff u25ba

  • ML

    Hi Jeff,nn1st..thanks for the site, very informative. nntwo questions for you.n1. Are you able to use the info from trading pro to make money? I was going to purchase the system but found on the web that ‘trading pro’ is a web business… so I just wanted to hear the review from an actual trader.n2. I enjoyed your spy 10am weekly video, are you trading live with the system? Any result that you might want to share?

  • Martin

    I purchased “Make Money Trading Stocks & Options DVD-ROM 24 Hrs” which also seems to be the same program. nnMartin

  • http://theoptionguru.com/blog Jeff W

    Mike,nnYes, it is. Why they changed it – who knows? Trademark infringement? But it’s exactly the same.nnu25c4 Jeff u25ba

  • Mike

    JeffnIs the tading pro system the same as trading as a business?

  • Anonymous

    Hey Wim in Belgium,My mother’s grand-parents are from your country. Her Grandfather was from France and her Grandmother from Belgium. That’s why my Mom always said she was so stubborn! u263aI have always had a standing rule: if a stock is priced like an option, then just buy/sell the stock. COCO is no too far from the price of an AAPL option. Which do you think has the most upside/downside potential?Let’s say you just simply bought an AAPL 280 Call last Friday for 6.15. Today it’s worth 9.70 – a gain of 3.55 or 57.7%.Alright, let me just address your trade. I would do it as a paper trade. I am guessing you are buying the stock at 6.39 and buying a protective Put at 5.00 and selling a OCT 7 Call for .35. You cost basis is 6.39 – .69 + .40 = 6.10. Not too bad since the stock looks like it may have hit support at 4.30. I don’t think the protective Put is going to do you any good. If we take that out of the cost basis you are now at 5.70.If you get called out at 7 your gain is 1.30 or 22.8%. Not bad my friend. But, will it get to 7? There are no dividends on this stock so our objective (if I were you) is to get called out.If, however, you are not, there are at least 5-6 scenarios that could occur the week of expiration depending on the price of the underlying.I would do the Covered Call on this if I were you, with a OCT 7, and forget the Protective Put. Why don’t you notify me the week of expiration and restate your question. This could be fun.u25c4Jeffu25ba

  • Anonymous

    Kyle,nnI understand your concern. I will note that I need to produce a major video to address this very same topic. I will show how to enter a SPY Weekly 10AM Spread and place a GTC Conditional Order based on the behavior of the underlying (SPY). It will be posted as soon as I can get the right conditions and time to produce it. Thanks for the idea.nnu25c4Jeffu25ba

  • Anonymous

    Kunal,nnFirst off, unlike you, I don’t work full time – or work at all (define that please). I have the pleasure of being able to keep myself in front of the market whenever I am able to convince myself that it is necessary or desirable – lucky me.nnRegarding your comment about being delta neutral: it’s not necessary that the market simply trades in a range. I believe that you start out either neutral or with a slight bias either way. The key is in having a methodology/strategy that allows you to go with the flow – either bearish or bullish – and still end up with a portfolio that is A) profitable and B) accommodating to the ups and downs of the market.nnThat means having a ‘profit tent’ on your portfolio that can absorb a trading range that is within a reasonable expectation of the position of the market on or close to the next expiration date.nnI do have a Conservative Portfolio that uses a trading methodology similar you our Covered Calls. Mine is doing rather well, but we aren’t in a market like we saw in late 2008 early 2009. Most of my ‘time’ is spent on the Spread Portfolio where I currently have some potion of my Spread plays in a Delta Neutral portfolio. This is to test, in front of all of my readers, the strategy promoted in the Trading Pro System product. Again, since we are all human and all brains are wired differently, I am applying the strategy as it is filtered through my faulty/dysfunctional brain cells.nnStay with me and let’s see how this works out.nnBy the way, so far your blog looks pretty good too. (http://www.hellostockmarket.com/)nnu25c4Jeffu25ba

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