Apple Iron Condor Example – Legging In To A Long-Term Condor

As part of Iron Condor month, I wanted to share a recent and ongoing iron condor trade on Apple (AAPL).

Back in May 2019, AAPL was selling off pretty hard and I wanted to take a contrarian position. The stock had dropped from 213.67 to 178.60, a drop of 16.4%.

Here’s the trade I entered:

Date: May 24, 2019

Current Price: $178.60

Trade Set Up:

Sell AAPL Jan 17th 2020, 150 puts @ $5.56
Buy AAPL Jan 17th 2020, 140 puts @ $3.75

Premium: $1.81 Net Credit.

By taking a long-term position, I was giving AAPL plenty of time to recover, generate some decent premium and also have a large margin for error.

The trade generated $1.81 with maximum risk of $8.19 which equates to a 22.10% return on capital.

A month and a half later, AAPL had risen to 203.23 and the bull put spread was sitting on profits of $132 having dropped from $1.81 to $0.49.

This seemed like a good time to turn the position into a condor by selling the call spreads.

Date: July 10, 2019

Current Price: $203.23

Trade Set Up:

Sell AAPL Jan 17th 2020, 240 calls @ $2.86
Buy AAPL Jan 17th 2020, 250 calls @ $1.76

Premium: $1.10 Net Credit.

At this point, the trade had brought in a total of $2.91 in premium with a maximum potential loss of $7.09 for a potential return on capital of 41.04%.

The breakeven points on the trade are 147.09 and 242.91 which is an enormous range of profit.

Yes, I have to wait a while to receive the full profit given I went so far out in time, but this trade is just slowly doing it’s thing and decaying away. I’ll explain more in a few days why I prefer long-term trades. And I’ll take a 41% return in 7 months any day!