A few weeks ago, it was common to see the market trade downward, but see the buyers come in late in the day and take control to push it back up. Now we are seeing the sellers seizing every opportunity to take their profits. Today's markets opened lower but were buoyed by a positive consumer confidence report for January this morning. This led a surge in the stock markets and boosted the S&P 500 to above its strong resistance level at $1100. But the selling began around 2 pm and continued throughout the remainder of the trading day. The SPX lost almost $5 to close at $1092 while the RUT closed at $612, down $6. Good earnings reports have generally been met with profit taking with the exception of AAPL, which is trading strongly after its excellent earnings report last evening.

My Feb RUT iron condor stands at a P/L of +$1,500, delta = +$64 and theta = +$77. The delta of the short 570 puts is 16. Both this delta and the theta/delta ratio near 1:1 tell us we are near a possible adjustment if the RUT drops much more.

My Mar RUT iron condor is roughly at breakeven with a P/L of +$100, delta = +$11 and theta = +$70. It is interesting to note that the delta of the short 570 puts is 24. But I have not required an adjustment to this position because adding the 670/680 call spreads balanced out the overall position delta. So our downside price risk is minimal. The risk/reward chart shows that this position will have a maximum loss of the order of $1000 or less down to RUT = $595 or so. When you have the standard iron condor configuration, watching the short option delta is a good adjustment trigger, but when you have mixed some of the spread positions, you must primarily watch your overall position delta and the theta/delta ratio.