TT - MM: IV Rank and Managing Winners, 11/06/13

TastyTrade - Managing Winners

Carry-out:

• Entry: look at AAPL and GOOG back to 2008, PCLN back to 2010
• High IV Rank (> 50%)
• Sold Big Boy Iron Condor w/45DTE
• Short strikes at 84% OTM
• Wings are 20 points out ($20 spreads)
• Exit:
• 25%, 50%, and 75% of max profit
• Compare to holding until expiration
• If target wasn't reached the position was held until expiration
• Determine drop in IV Rank over length of trade

• Close at 25% to maximize P/L-per-day and free up capital
• Close at 50% to maximize P/L and reduce losers
• No reason to hold longer (unless perhaps IC is centered and POT of shorts is very low)