No.

See ya next week.

I kid, I kid. Here’s the full answer.

Let’s assume you’ve been diligently following Cash Flow Condors by deploying RUT Index Iron Condors every month this year. By my count, you’re on a nine-month winning streak (April – Nov). Were it not for the terrible first quarter that began the year, we could chalk 2019 up as a resounding victory for our feathered friend. But as it stands, it’ll probably end up a modest winner for the year, depending on whether you successfully managed any hedges along the way.

But with the RUT a whisker away from breaking out and the S&P 500 already pushing into virgin territory, you’d be forgiven for worrying about whether December will be able to survive a year-end rally intact. My bear calls, for example, are pinned at 1670/1680 so all the Russell 2000 needs to do is rally 4.4% by December 20th, and I’m toast.

So what should I do? Consider the following:

First, chill out. Maybe RUT rips into year-end, maybe it doesn’t. Remember, we’ve had a handful of possible breakouts through $1600 this year, but each inevitably failed. If you bailed on your bird prematurely, then you wouldn’t have enjoyed the nine-month winning streak.

Second, even if RUT does fly to 1670 and beyond, so what? You’ll take the loss and move on to the next month. Trading the system successfully doesn’t require you to dodge losing months. It merely requires consistent execution. Just ask those who stuck with it after getting punched in the face in Q4 last year. They were rewarded with nine winners in a row when the pendulum swung back in their favor. And, spoiler alert, the pendulum always swings back in your favor. ALWAYS.

Third, my preferred way to lose on a condor is due to the market being too bullish. It’s much easier to profit from other trades like naked puts, covered calls, bulls puts, and the like, in that environment. My December condor should lose around $350 per contract if we run to $1670. My job during such adversity is to take the lemon and make lemonade. I need to make $350 on other trades to offset it.

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