2013Oct29 Dan Sheridan

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Sheridan Options Mentoring, Inc. www.SheridanMentoring.com

October 29, 2013

Dan Sheridan

Iron Condor Plan and a Credit Spread

Plan for Weeklys (SM) Income


Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options. Copies are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation at www.theocc.com. The information in this presentation is provided solely for general education and information purposes. Any strategies discussed, including examples using actual securities and price data, are strictly for illustrative and educational purposes. In order to simplify the computations, commissions, fees, margin interest and taxes have not been included in the examples used in this presentation. Such costs will impact the outcome of the stock and options transactions and should be considered. Multiple leg strategies involve multiple commission charges. Parameters relating to past performance of strategies discussed are not capable of being duplicated. Investors should consult their tax advisor as to how taxes affect the outcome of contemplated options transactions. No statement within the presentation should be construed as a recommendation to buy or sell a security or to provide investment advice. Brokerage firms may require customers to post higher margins than the minimum margins specified in this presentation. Supporting documentation for any claims, statistics, or other technical data is available from Sheridan Options Mentoring. Chicago Board Options Exchange, Incorporated (CBOE) is not affiliated with Sheridan Options Mentoring or OptionNet. This presentation should not be construed as an endorsement or an indication by CBOE of the value of any non-CBOE product or service described in this presentation.

Disclaimer

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Credit Spreads


Guidelines

At or above 20 Day Simple Moving Average - put on Put credit

Spread

At or Below 20 Day Simple Moving Average - put on Call credit

Spread

Usually stay away from Earnings date, but don’t have to

Days to Expiration? 15 DTE

Where to sell Short Strike? 15-16 short delta or less ( 15-16 not

available, range is 13-19)

Where to buy long strike? 10 points up on call side and 10 points

down on put side

Minimum Credit? $0.75

Yield Target per week? 7-9% on risk capital


Guidelines Continued

Profit Target ? 80% of credit

Max Loss of trade? Credit

Max time allowed in trade? 8-Days

When will I usually put this trade on? Every Thursday at 10:30 am

central

Should I use contingent orders?

Stay out of earnings week

Possible 1-2 day overlap of trades


Case Study

Open Margin Credit Close DIT Yield

Jun 6 $266 $0.80 Jun 10 4

Jun 13 $273 $1.05 Jun 19 6 8-9%

Jun 20 $275 $0.77 Jun 28 8 7%

Jun 27 $277 $0.92 Jul 5 8 8%

Jul 5 $283 $0.81 Jul 9 4 7%

Jul 11 $296 $1.10 Jul 19 8

Jul 18 $305 $1.05 Jul 26 8 Earnings after

the close

Jul 25 $299 $1.29 Jul 26 1

Aug 1 $299 $0.82 2nd call credit

spread

NOTE: Aug 15 didn’t play. Only 12 or 20 short call delta and 20 out of range

and 12 didn’t get minimum credit


AMZN Above 20-Day Moving Average Sep 5, 2013


AMZN Credit Spread







4-Day Iron Condor


Guidelines

RUT Monday 10:30 am central, Width 10 wide ,

Minimum credit .80

Sell 10 delta call and put preferably

Minimum .30 per side

Only 7 or 11 delta available, use 7 delta as long as

you can get .80 for entire Iron Condor


Guidelines

Profit Plan: 70% of credit

Max Loss : Credit of Iron Condor

Down 75% of total credit end of day, take off

Don’t sell over 12 delta calls or puts period!

Note: Paper Trading problem closing out trade with

OTM options priced at .05?

Philosophy: Don’t Quit!






Dan Sheridan

+1-800-288-9341

[email protected]

Sheridan Options Mentoring, Inc.

http://www.SheridanMentoring.com/

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2013Oct29 Dan Sheridan