Option Strategy: [Content protected for Monthly members only]
Trade entry date: May 8
Price at trade entry: $28.09
Price at this post: $24

Reasoning: WPRT hit the trade’s downside breakeven point so we’re going to close out the put portion of the trade to prevent a large loss. The call spread portion should expire worthless this Friday.

Closing Trade Details:

STC 7 WPRT May12 23 puts
BTC -7 WPRT May12 24 puts
for a net debit of $0.45 per contract (current bid $0.15 / ask $0.45) (GTC, limit order). If not filled by 3pm EST, up your bid price to the ask to ensure a fill.

Max Risk: $560
Max Reward: $140 or 25% by May 18
Profit Range: between $24 and $32 by May 18
Suggested Downside Stop @ $24
Suggested Upside Stop @ $32
Profit / Loss upon fill: ($175) (pre-commission)

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Price at trade post: $25.10
Option Strategy: [Content protected for Monthly members only]

Reasoning: Following Patriot Coal’s announcement of lower sales volume due to a default by a key customer, pretty much every coal stock was crushed this week, including best of breed Peabody Energy. With BTU trading at a multiyear low, it’s unlikely that it’ll drop another 17% and, considering the pressure on the coal industry, it’s equally unlikely it’ll rise by 22% by June expiration. So, we’re trading BTU using an iron condor with a profit range between $21 and $31 by Jun 15 that yields 25%.

Trade Details:
[Content protected for Monthly members only]

Max Risk: $560
Max Reward: $140 or 25% by Jun 15
Profit Range: between $21 and $31 by Jun 15
Suggested Downside Stop @ $21
Suggested Upside Stop @ $31

Non-members, click here for access

Reasoning: Post earnings, we’re expecting AAPL to settle down for a while. [Content protected for Monthly members only]

Trade Details:
[Content protected for Monthly members only]

Max Risk: $840
Max Reward: $160 or 19% by Jun 15
Profit Range: between $495 and $610 by Jun 15
Suggested Downside Stop @ $495
Suggested Upside Stop @ $607

Non-members, click here for access

Option Strategy: [Content protected for Monthly members only]
trade entry date: May 2
Price at trade entry: $584.60
Price at this post: $561

Update: Upping limit order to $0.49 debit in hopes to get filled today.

Closing Trade Details:

BTC -2 May12 615 calls
STC 2 May12 620 calls
STC 2 May12 535 puts
BTC -2 May12 540 puts
for a max net debit of $0.49 per contract (GTC, limit order).

Max Risk: $752
Max Reward: $248 or 32% by May 18
Profit Range: between $540 and $615 by May 18
Suggested Downside Stop @ $540
Suggested Upside Stop @ $615
Realized Profit / Loss upon fill: $150 or 19.7% (pre-commission)

Non-members, click here for access

Option Strategy: [Content protected for Monthly members only]
trade entry date: May 2
Price at trade entry: $584.60
Price at this post: $563.80

Update: Didn’t get filled at $0.30 debit on Friday. Upping limit order to a $0.35 debit here.

Closing Trade Details:

BTC -2 May12 615 calls
STC 2 May12 620 calls
STC 2 May12 535 puts
BTC -2 May12 540 puts
for a max net debit of $0.35 per contract (current bid $0.32 / ask $0.41) (GTC, limit order).

Max Risk: $752
Max Reward: $248 or 32% by May 18
Profit Range: between $540 and $615 by May 18
Suggested Downside Stop @ $540
Suggested Upside Stop @ $615
Realized Profit / Loss upon fill: $178 or 23% (pre-commission)

Non-members, click here for access

Option Strategy: [Content protected for Monthly members only]
Trade entry date: Mar 19
Price at trade entry: $65.17
Price at this post: $63.90

Reasoning: Downside stop triggered, closing trade to avoid further losses.

Closing Trade Details:

BTC -7 JNJ May12 65 Calls (at ask)
STC 4 JNJ Jul12 62.5 calls (at bid + $0.01)
STC 5 JNJ Jul12 65 calls (at bid + $0.01)

Max Risk: $1,575 (adjusted down from $1725)
Max Reward: unlimited by May 18
Profit Range: @ $65 and $67.3 + on May 18
Suggested downside stop: $64.35
Realized Profit / Loss upon fill: ($465)

Non-members, click here

Option Strategy: [Content protected for Monthly members only]
Trade entry date: Apr 25
Price at trade entry: $94.95
Price at 1st adjustment: $97.85
Price at this post: $92.03

Current Position:
[Content protected for Monthly members only]

Reasoning: Hindsight is always 20/20 but sure wish we didn’t add on the 97.5 strike calendar. Unless MCD makes a recovery back up to $94 by next friday, this trade will likely result in a loss. Entering in GTC closing orders here that should get filled with MCD trading just over $93.

Closing Trade Details:

STC 5 MCD Jun12 97.5 calls
BTC -5 MCD May12 97.5 calls
for a net credit of $0.28 per contract (current bid @ 0.16 / ask @ 0.18, GTC, limit order)

BTO 5 MCD Jun12 97.5 calls
STO -5 MCD May12 97.5 calls
for a net credit of $0.64 per contract (current bid @ 0.44 / ask @ 0.46, GTC, limit order)

Max Risk: $600
Max Reward: $200 or 33% by May 18
Profit Range: $94 to $98.20 by May 18
Max Profit at: between $95 and $97.50
Profit / Loss Upon fill: ($145) (pre-commission)

Non-members, click here for access

Option Strategy: [Content protected for Monthly members only]
trade entry date: May 2
Price at trade entry: $584.60
Price at this post: $568.82

Reasoning: With the trade up nearly 25%, we’re going to see if we can close it here. If you’re willing to risk a dramatic move on the stock next Monday, you should be able to close to trade for a higher profit early next week.

Closing Trade Details:

BTC -2 May12 615 calls
STC 2 May12 620 calls
STC 2 May12 535 puts
BTC -2 May12 540 puts
for a max net debit of $0.30 per contract (current bid $0.24 / ask $0.37) (GTC, limit order).

Max Risk: $752
Max Reward: $248 or 32% by May 18
Profit Range: between $540 and $615 by May 18
Suggested Downside Stop @ $540
Suggested Upside Stop @ $615
Realized Profit / Loss upon fill: $188 or 25% (pre-commission)

Non-members, click here for access

Option Strategy: [Content protected for Monthly members only]
Trade entry date: Mar 19
Price at trade entry: $65.17
Price at this adjustment: $64.70

Current Position:[Content protected for Monthly members only]

Adjustment: Took in an uncalled return of 7% this week by selling the 65 strike calls last week. We’re now rolling the short 65 calls to next week + selling two additional 65 calls. If you have the free capital in your account, you could just let this week’s short calls expire worthless and write next week’s calls. Adjusting suggested stop to 64.35

Trade Adjustment Details:[Content protected for Monthly members only]

Max Risk: $1,575 (adjusted down from $1725)
Max Reward: unlimited by May 18
Profit Range: @ $65 and $67.3 + on May 18
Suggested downside stop: $64.35

Non-members, click here

The Iron Condor options strategy is used when a trader believes that a security will remain within a trading range for a specified period of time.

This is a sophisticated options strategy that requires buying and holding 4 options with different strike prices, but the same expiration date. There are two ways to explain how an iron condor is structured:

Explanation #1: An iron condor is a combination of two different strangle strategies. A strangle requires purchasing or selling a call option and a put option with different strike prices, but the same expiration date. There is limited loss and gain on this trade because the trader puts an offsetting strangle around the two options that make up the strangle at the middle strike price.

Explanation #2: An iron condor is simply the combination of a vertical bear call spread and a vertical bull put spread. This is our preferred explanation. A vertical bear call spread involves selling a call option and buying a further out of the money call option for a net credit. A vertical bull put spread involves selling a put option and buying a further out of the money put option for a net credit.

Structured correctly, Iron condors can afford the trader both a high probability and flexible trade. They are high probability because they are non-directional and take FULL advantage of the fact that 77% of all options expire worthless. The key to properly structuring an iron condor is to determine a trading range for the stock for the chosen time period. An additional benefit of the iron condor is that if the stock does happen to trade outside of the trade’s range, you have the option of going long the stock either at your short put strike (if the stock is under the short put strike at expiration) or buying the stock to cover the short call.

Here’s a sample iron condor trade:

Stock / Symbol: Market Vectors Gold Miners ETF / GDX
Last Price: $43.02

Reasoning: The odds of GDX trading at/under $38 by June expiration are only 17%, and the odds of it trading at/over $48 by June expiration are only 15%. Therefore, this trade has an 83% probability of success.

Trade Details:
STO 1 GDX Jun12 48 call
BTO 1 GDX Jun12 49 call
STO 1 GDX Jun12 38 put
BTO 1 GDX Jun12 37 put
for a net credit of $0.20 per contract (current bid $0.19 / ask $0.26)

Max Risk: $80
Max Reward: $20 or 25% by Jun 15
Profit Range: between $37.80 and $48.20 by Jun 15
Max Profit: between $38 and $48 by Jun 15
Suggested downside stop: $38
Suggested upside stop: $48

Note: increase the number of contracts equally on each leg till you reach your desired risk / reward level.

Here’s to smart Trading,

The OptionWiz