Benzinga | Jul 27, 2021 11:13AM EDT

'24/Hr' UNH Trade

Hey 5-Star Trader,

"Tuesday Trade" Journal: One of the most important concepts in trading is to review your work, and learn from the good and the bad. Identifying what is working is critical -- to do more of it. So, to lead by example, each Tuesday, you'll get a trade from my trading journal, in which I explain my thought process from start to finish. Trading is all about finding something that works and applying it over and over again. That's how you find trading success. So study up on this "Tuesday Trade" and let's get to work.

Today I want to outline my trade in UnitedHealth Group (NYSE:UNH).

Earlier this month we saw the market rally into the 4th of July holiday weekend, but by the middle of July, there were signs that sentiment was changing.

On July 14, I noticed UNH had high open interest, so I knew I wanted in. Keeping in mind the sentiment change of the market, I decided to put on a neutral trade with an iron condor targeting $415 SELL -1 IRON CONDOR UNH 100 16 JUL 21 415/425/415/405 CALL/PUT @6.33 limit order (LMT).

In order to make this a profitable trade, I needed UNH to move less than the credit which was $6.33. Even though this was a neutral trade, it's also inherently riskier because this was set to be an overnight trade with no possible stop. In these situations, risk control is paramount.

The very next day I was able to close out my iron condor for a profit because it moved within my predetermined range BUY +1 IRON CONDOR UNH 100 16 JUL 21 415/425/415/405 CALL/PUT @4.59 LMT.

Although iron condors are not always applicable, they can be a great setup when the market is lacking direction... like so many recent days.

Want more market advice? Join Danielle's Stacked Profit's Mastery program. There she gives you real-time entries and exits as well as advice about current market conditions.

Image by Darko Stojanovic from Pixabay