Opened CSCO iron condor

I've opened an iron condor on CSCO intended to gain some premium off of its long-running sideways movement. The trade executed with the stock at $23.54 and earned 42 cents credit.

The stock options are structured so that the trade shows a maximum profit at expiration on March 19 if the price of the stock is from $23 to $25. Those are the strike prices of the options I sold. The insurance options I bought are $1 either side of the shorts.

Schematically, it's p22/-p23/-c25/c26.


The iron condor is profitable if the stock ranges down to $22.56 or up to $25.44. The high end exceeds any high seen since the spring of 2008. The low end is within a recent area of congestion and is right at the level of support set in July 2009.

Assuming the sideways trend continues, it seems like a fairly strong set of boundaries.

Earnings were announced on Feb. 3, so there's no cause of volatility visible now. There is always the possibility of a surprise besides earnings, of course. So as always with a live postion, I must be on my toes.

Maximum loss exceeds maximum gain by 16 cents per dollar.

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Topics:
Cisco Systems networking.