NDX Condor 3-18

Ugghh!!!!  This was a BRUTAL day.  I was feeling great this morning for this trade as I watched the market creep down.  Was I ever surprised when I saw it bounce back to sizable gains.  As I mentioned yesterday, I had to be prepared for the worst.  I still believe what I said yesterday (although I'm saying it with slightly less conviction today) about the top of this rally being near.  As a result, I took the approach of buying a couple of calls to flatten the deltas.  Here is what the current picture looks like:

You can see the white line is nice and flat near the current price.  My plan for this is to watch the deltas on the short 1325 call.  If they drop below 15 I will sell the calls and be back in the original condor.  This comes at a cost, but it's only about 1/3 the total profit on the trade.  In other words, I could do this a couple of times and still be profitable.  The danger comes in getting whipsawed too many times, in which case the losses can just mount.  That's why this is a good adjustment if I believe the price will retreat.

If you look close you may also notice that there is one missing Bull Put spread.  The 800/775 hit it's profit target today and was bought back.  This will be favorable if the market drops hard.  I guess we'll know more tomorrow. 

Overall, this is EXTREME ugly.  This is a tough month and it will take a lot of patience and discipline (and don't forget luck) to manage this back to profitability.

Good Trading...