Option Traders used Iron Condors in $REGN

Options Traders love to use the Iron Condor to collect premium when they feel the stock will sit within a range for a specific period of time.  In the Time Bandit Option Service, we identified Regeneron ($REGN) as a potential candidate for an Iron Condor.  We selected the 300-332.5 Iron Condor.

This is selling the 300 puts and 332.5 calls and buying the 290 puts and 342.5 calls as protection.  On April 19th we entered this option trade to collect about $1.50 per Iron Condor option spread that was entered.

After the weekend and a couple of idle days we noticed that the spread came in to a mid market price of about $0.40 where we alerted subscribers that they could take off the trade and eliminate the risk completely if they wanted.  On Wednesday and Thursdays the stock bucked the movement of the market and rallied pretty strongly.  As the stock was moved back into the area that we entered the Iron Condor we again suggested to take the Iron Condor off for about $0.40.  Friday came with a surprise that one of their strategic partners had earnings and dropped the stock pretty significantly.

Our short strikes(300 put) held at the support level (as they are designed to do) and anyone that was still left in the trade was able to collect full premium at the end of the day with the stock closing at $313.05…well within our IC range.

For those who took off the risk early…they locked in $1.10 without dealing with any of the extra risk of partner earnings.

For those who held on to the entire option spread was rewarded with the full $1.50 premium collected.