All of the major indexes closed down modestly today, with the exception of RUT, the index I wanted to pull back a bit! Stocks opened weakly this morning but then recovered and traded near the unchanged mark for most of the day. SPX closed at $1145 for a $3 loss, but RUT gained $2 to close at $678. Trading volume was flat to down for the day with a 5% drop on the NYSE and a 2% drop on NASDAQ. Trading in the S&P 500 stocks rose slightly to the 50 dma at 3.4 billion shares. Some of the news coming out of Europe regarding sovereign debt and the European banks banks has been unsettling and probably accounted for today's weak market in the absence of any significant economic news.

My Oct iron condor has been teetering on the brink of major adjustment for several days if not weeks. Today's strength in RUT pushed me to act. Buying the Nov $690 calls gave me time to wait for RUT to either pull back or at least just trade sideways, but I decided it was just not prudent to wait any longer. I closed and rolled my 690/700 call spreads to 720/730 and closed and rolled my 540/550 put spreads to 610/620. The position remains underwater, but this improved the position Greeks markedly to a delta of +$56 and theta = +$189. At this point, we are in salvage mode. Depending on the outcome of our Nov $690 call hedges, we will either break even or incur a small loss. But the condor trader always looks at the big picture - we made $2,590 last month, so if we break even or lose four or five hundred dollars this month, that's ok. The crucial success factor is to manage the risk so we never incur the large debilitating loss. Our Nov condor sits at a P/L of -$1,360 with delta = -$65 and theta = +$82. If RUT continues upward, we may be adjusting that position as well since the delta of our Nov $740 calls is up to 18.