Easy Option Strategies – Iron Condor With US Steel X

Today I once again used one of my favorite money making stock options strategies to get a position on US Steel, which trades on the New York Stock Exchange under the symbol X.

US Steel (X) stock is currently near its 52 week low of 21.96, trading at around $23 a share. Volatility in the overall market is up, so I am looking to sell some premium. I chose to sell an Iron Condor, which is essentially selling a put spread while at the same time selling a call spread.

I sold the 19 / 22 put spread and the 27 / 30 call spread for January 18th, 2019 expiration, which is 50 days away. I collected $100 as my premium. This iron condor is skewed to the upside, I am looking for a little bit of a bounce here. Below you can see a screen shot from my tastyworks account. If you are interested in learning about how to trade stock options, I recommend you check them out. In my opinion, they are the best brokerage for stock options.

 

easy option strategies

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Best case scenario would be for X to stay above 22, and below 27. If it does, I would get to keep all of my premium. But honestly, I plan to buy this iron condor back, for half of what I sold it for.

Here is another way to look at this trade. You can see that I sold the 22 puts and the 27 calls in red, and bought the 19 puts and the 30 calls which are in green.

easy option strategies

Another thing that you can see from the picture above is my Max Profit is 100, which is what I collected when I sold this iron condor position. My Max Loss is 200, which calculated by the width of my strikes, less any premium collected. I prefer to use limited risk stock options strategies over unlimited risk stock options strategies.

US Steel X Stock Technical Analysis

I always like to use stock chart technical analysis before I open a position, and below are some of my favorite tools. Some traders rely solely on technical, but I am not one of them. Before I enter into a trade I make sure to look for any news and information from FINVIZ, just to see if there are any upcoming earnings reports, or dividends. FINVIZ is the one stop shop for all the current news about any stock.

The Bollinger Bands show that X is pushing down on the lower band. From what I understand, technical traders will look for it to close above the lower band, then go back up to the center line, which is the 20-day moving average in this case. You can see that since mid June 2018, X has taken a beating to the downside.

stock technical analysis

The figure below shows the Fibonacci Pivot points for X as of today. Looks like X has broken though support of 23.64 shown by S2, and the next support is going to be at 21.32. These pivot points are calculated at the first of every month, and since there are only 2 more trading days left until December, I wouldn’t put much into those levels, I’m more eager to see what happens next month right now.

stock technical analysis

The last of my technical tools are the RSI, the MACD, and the Stochastic. The RSI shows that X is oversold at 29.04. This makes me feel bullish. The MACD and the Stochastic disagree, with MACD saying more downside, and the Stochastic saying maybe not.

stock technical analysis

I put this trade on with 50 days until expiration, because time decay for stock options is the starts to accelerate at 45 days. I could have sold the closer to expiration December iron condor, but I usually only sell that close when I have a strong directional opinion, and I will only sell one side, not an iron condor. With 50 days, I have time to manage this call if it goes against me.

One final note, understand that I am not posting this to give you financial advice. I am not an adviser, and there is risk involved with option trading. You can lose money.

I would love to hear from anybody reading this. Good, bad, agree, disagree, just want to say “Hello.” or tell me this is garbage.

Wondering what stock options are all about?  Check out this video made by TASTYWORKS, the best broker for retail investors.

James

I live in Pittsburgh PA with my family. I am 50% WWE Wrestlemaniac, 50% Walt Disney World nut.

10 thoughts on “Easy Option Strategies – Iron Condor With US Steel X

  • November 29, 2018 at 5:54 pm
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    Hello and thank you for this informative post James. It was really a pleasant read. I am not a financial expert but I did enjoy trading on Forex like a few years ago. This did not turn out too well. Maybe it was me being to uneducated and uninformed about stock exchange but I started with 100$ earned around 20$ and the and then lost all money. 

    It felt like I was on roulette. However, I feel like getting in again, but I am not sure what stocks should I trade or purchase. Reading your article, I can see that you are a sort of an expert here.

    What kind of platform do you recommend for a beginner to start his stock exchage career?

    Thank you.

    Strahinja

    Reply
    • November 29, 2018 at 7:40 pm
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      I strongly recommend TASTYWORKS. They have the lowest fees for investors.  

      Reply
  • November 29, 2018 at 5:55 pm
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    Hi James,

    I’m just a beginner when it comes to investing and the stock trading markets and was looking for education resources online when I came across you blog. 

    I’m going to be honest, I didn’t understand much of the information on this post lol. Are there any books you recommend to beginners to start learning about stock trading? 

    Cheers,

    Miguel

    Reply
  • November 29, 2018 at 6:03 pm
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    It very interest about tastyworks that keep your fee low that will save your money. Tastyworks brokerage is good for me because it my first time learning about it and it will be good for people too because your detail have everything about tastyworks in this site 🙂

    Thank You for this article that helpful me.

    Reply
  • November 29, 2018 at 6:08 pm
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    I remember a time like that a friend promised to train me stocks option but he never did.May be he himself was not knowledgeable about it..anyway, i gradually lost taste for the training.But honestly, with what am seeing on this website especially when I went through the tasty works, am beginning to change my mind to put in for the training once again..this article has awaken my interest on stock option again..lol

    Reply
  • November 29, 2018 at 6:14 pm
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    This is a world which I have never dared to enter, and about which I know nothing!

    But it is very obvious that you are very knowledgable about the world of trading, and that for you it works very well.

    The only thing I do know is that it would be very foolish to try to emulate what you do without having your kind of knowledge. You state that profits can go down well as up, but that is pretty obvious even to me!

    But if someone did want to learn about how to trade, and bearing in mind that money can be lost, what amount of money would you recommend anyone who is starting out should be prepared to lose, even though we hope that with the right advice they would gain?

    Should I ever decide to go down this route, I would definitely come back to your site in order to buy one of the beginners’ books which you recommend.

    Very many thanks

    Chrissie 🙂

    Reply
    • November 29, 2018 at 7:26 pm
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      You can open a TASTYWORKS account with no money at all.  You can start with whatever you feel comfortable with.  With this trade, I risked $200.  That isn’t really much.  My max profit is $100.  That would be 33% in 50 days.

      Of course this is a single trade, and I could have risked more, but I just want to show that it doesn’t take a lot to get started in the world of options trading.

      Reply
  • November 29, 2018 at 6:17 pm
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    This is very much of interest to me.  I have been looking into trading and stock but have not gotten to the point of investing yet.  I am still learning as much as I can.  It is just as easy to lose your money as it is to gain some money.  It’s all about knowing what the best options are.  I would like to invest my money but am not sure about the best way to go about it.  Is this open to Canada?  I have seen some sites like this that are not an option to Canadiens. 

    Reply
    • November 29, 2018 at 7:23 pm
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      Definitely.  CHECK OUT TASTYWORKS to learn how you can learn how to trade stock options.  It is more than just a brokerage.  It is the authority for retal investors to invest.

      Reply

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