RUT Update 4-28

Each month I track and update a particular trade, which this month, was a bit complicated.  We had two overlayed condors on the Russell 2000 (RUT) followed by a triple calendar.   Today we are nearing the end of the campaign.  As you may have noticed if you have been following along, I closed the calendars a few days ago when they hit their profit target, and now is the time to start unwinding the condors.

As you can see, the trade is nicely profitable and it's time to close it down.  I'm not sure how it will all turn out with slippage and all, but it should exceed 8% for the month, which is just fine.  Starting tomorrow morning we'll begin taking it apart and try to minimize the slippage by working the mid-points just a little bit.  This is an area that I think is often overlooked by traders, especially those starting out. 

Many times you come up with a system or approach that seems good on paper or in backtesting, but it doesn't work quite as well in the real world.  Much of that is due to slippage... that little amount that you have to give up to market makers as prices move away from the mid-point between bid and ask.  I don't have a fool proof way of dealing with it; but I find that if I just have some patience and pay a little attention to market direction it's possible to get out without too much damage.  For that reason I'll assess things in the morning (early, when I enter my trades) and try to figure out the best approach to getting out.  I could just enter orders to sell everything at once, but I would most certainly pay a hefty price for that.  I'll report on the final result when I'm done exiting the trade.

Good Trading...