New Positions 2/10/16

Trades were filled around 3:20pm on 2/10/16

XOP- March-4 20/22/28/30 short iron condor filled at 0.85 (mark was 0.88, closed at 0.89)

• Implied Volatility Percentile (IVP): 99
• Days to Expiration (DTE): 44
• Probability of Profit (PoP): 50.78%

GLD- March 105/107/121/123 short iron condor filled at 0.48 (mark was 0.50, now 0.51)

• IVP : 100
• DTE : 38
• PoP : 69.24%

Stocktwits Stream

$XOP short iron condor March-4 exp. 20/22/28/30 FILLED @ 0.85
— Brandon Powers (@BrandonP) Feb. 10 at 03:20 PM

$GLD short iron condor March exp 105/107/121/123 FILLED @ 0.48
— Brandon Powers (@BrandonP) Feb. 10 at 03:18 PM

Overall some good probability trades to start out with! Fingers Crossed!

Above I mention where the mark is in relation to where I was filled. There's a reason for that. Nobody is ever going to be filled at the theoretical mid price on options. This is called 'slippage.' Market makers make their money buy buying at the bid and selling on the offer/ask. If you get filled at the mid price, the market maker makes no profit. An example is today in the GLD:

Bid = 0.46 Offer = 0.54 ... Mid = 0.50

If you want to open a credit position, or a position where you are net selling (receiving a credit to your account), you will always have to sell closer to the bid, underneath the mid price. Opening a debit position means you will have to buy closer to the offer, above the mid price. In other words, you can't set your limit order at the mid and expect to be filled. That is, unless the mid price changes. If you set your limit order in the above example at 0.50, that order will sit pending until the mid price advances a cent or two to 0.52, at which point you will probably get filled at 0.50.

That said, NEVER USE MARKET ORDERS!!!!! In a market order, you will sell AT the bid and buy AT the offer. This means you will not only get a bad fill, it will also be costlier to exit the position immediately in the event you made a mistake. With my current broker, cancelling orders / modifying orders is free. That means you can adjust your limit at no extra cost, and it also means that you can change your limit in the event you don't get filled soon enough. My orders sat with limit set to mid price today for about 25 minutes before I finally gave in and sold under the mid. Always go for mid price first since it's the best possible fill, but leave enough time to adjust your limit since you probably won't be filled.