Wanted to express some thoughts on the stupidest thing I have ever done in my trading career. This week, I reestablished my IC by replacing most of the bear call spreads with new ones. This move totally goes against everything the IC stands for. 1. By reestablishing the IC, I actually take a directional view of the market--this goes against my philosophy of IC's, but I didn't thoroughly think this out. 2. I subscribe to mean reversion theory--basically the market moves to extremes and either bounces or pull back to within the body of the IC. Actually, the March period was the perfect set-up. I was able to exit all of my bear call spreads, keeping 80-90% of the premium. Once the market bounced, I would also be able to keep 80-90% of the premium generated by the bull put spreads. By reestablishing the IC, I discount the possibility of a bounce. Once the bounce occurs, the bear call spreads begin to lose money. Keeping 80-90% of the total premium received when establishing the IC is an excellent return on equity. For me that would have meant and 8% return on equity for the March period. Instead, now, I am looking at a 3% return or a break-even. 3. The profit from the original bear call spreads will always act a hedge to the short puts, for it is locked in. For Example, I want to walk through the March trade: Long Put: 2.50 premium Short Put: 6.50 Short Call: 2.50 Long Call: .50 Total premium received=6.00. Incidentally, the short call basically pays for the insurance demonstrated by the long put. So, instead of looking at this IC, I look at the bear call spread and bull put spread independently. Now, the market has moved downward, the picture looks like this: Long Put: 5.00 Short Put: 13.50 Short Call: .40 Long Call: .20 At this point I am down 2.70 points. Now I exit the bear call spreads. My profit for the bear calls is 1.80, my loss for the bull puts is 4.50. Now the market bounces and the trade looks like this: Long put: .25 Short put: .50 My profit from the bull put spreads is 3.75. If I left the bear calls in place, they would have lost their profits, and by placing new bear calls, they eat into the profits big time. So, total profit by not adding the new bear calls is 5.55 out of a possible 6. My past trades have basically worked like this, although the underlying never really came close to the edge of the body. I lost faith in the March cycle, and I was punished. Bottom line: IC's are speculative; they are not delta or market neutral, for the greeks are dynamic and one cannot "make the adjustments;" don't adjust at all, just manage or exit when your comfort zone is breached; never hold these to expiration--get out by the Monday before or earlier; have faith in your placement of the body and wings--if they are constantly touched and that puts the trade out of your comfort zone, consider moving the body. Lastly, it is best to enter your IC legs all at once, but think of the trades as bear call spreads and bull put spreads and manage them appropriately. Just wanted to air out my stupidity so others do not make the same mistake.