Spirit of '87, '01, or '08?

Whether it's September, October or November - fall seems to be the cruelest season of all for equity market bulls. This is the scenario that I have been positioning myself for all year -- limited risk with the potential for unlimited gain if the market collapses.

My "one winged" Nov SDS condor (outlined below) and my short AMZN 130 call/long AMZN 100 put credit spread ($115 gross, $109 net) are both looking very good.

I want to hedge the AMZN spread and will do so when time decay and/or a further fall in price for the underlying gets the premium for the 135 call down below $50 or so.

November "One Wing" SDS Condor In Place

Able to put the 33-34-53-54 one-wing condor together for $100 gross, ~$79 net. Looking forward to expiration.

October Expiration

Another good month. The Oct DBC 20-21-24-25 condor expired out of the money. The Oct SDS 35-36-50-51 "one winged" condor was fine too, after a brief concern resulting from the equity rally early in the week.

DBC got close to 24 towards the end of the week, so I bought the three DBC 24 calls back at a nickel each today, and the two SDS 36s and the SDS 50 for the same price early in the week, so I made $30 less than if I had held them all the way to expiration, but it was worth it to be able to sleep soundly at night -- and to be able to go to work today without worrying about volatility on options expiration day.

New position -- short 2 Nov SDS 34 puts at an average price of $40 each, for a total of $80 ($74.10 after commissions). I legged in at $30 and $50. I'll build a one-winged condor around them as market conditions permit. Still short-term bullish, but longer-term bearish on the U.S. equities market because of the fiscal irresponsibility of the Obama Administration and the Democrats in Congress (in addition to the trillions in paper that the Fed is printing) -- but I'm flexible.

October Expiration Update - One and a Half Winged Condor

With the market's decline last week, my previously discussed double-short position in the stock market (short 2 SDS Oct 39 puts, long 2 SDS 51 calls) is paying off -- especially since I hedged it this week by buying a couple of Oct 38 puts for a nickel each and selling a 50 call for a quarter.

Not a classic iron condor, but I didn't want to completely cap my profits, just in case U.S. equities decide to tank in the next couple of weeks.

So, with just $200 at risk, I have a $65 credit in my account, with the potential for increased gains if the market continues to decline. A very good position to be in, but I take nothing for granted and will watch the position all the way to expiration.

The risk/reward also looks good on the DBC iron condor -- but I will watch that one too, and take appropriate action if it moves against me.