The phrase
"iron condor" refers to a type of options trading strategy that involves simultaneously buying and selling options to potentially profit from a stock or index staying within a specific price range. It is called
"iron condor" because the options positions resemble the shape of a condor's wings when plotted on a graph.
Full definition
Do you tend to establish
Iron Condor positions based on deltas of short options, distance between shorts, minimum credit amounts, other?
It's generally safer to
trade iron condors on indexes because you never have to be concerned with a single stock issuing unexpected news that results in a gap of 20 % or more.
This is a quick post to let you know that I closed the Put leg of my May
Iron Condor on RUT.
It's 4 1/2 months into the year and I've found this to be one of the easy periods for
iron condor traders.
Using a similar example I (modified a little bit from the one in the book) traded one
Iron Condor at $ 2.30 with 5 weeks to expiration: — Sold one call spread at $ 1.20 — Sold one put spread at $ 1.10
I don't recommend this method
for iron condors, although «delta neutral» trading has a great deal to recommend it under different circumstances.
With the recent pullback, my
RUT Iron Condor is moving into the profit zone for May expiration.
The maximum loss is $ 950
per iron condor, when you only collect $ 50 to initiate the trade.
We'll cover our favorite strategies to profit even when stocks are falling
like iron condors, strangles, etc..
This is a quick post to let you know that I closed the Put leg of my
May Iron Condor on RUT.
You can easily
find iron condors with a 90 % (or even higher) probability of being winners.
Base the decision on
which iron condors make you nervous about potential losses both when you open the position and as the risk changes over time.
Traders do not need to
understand iron condors, broken wing put flies, or the Greeks to make money from trading options.
But, please use a practice account and do not use real money until you truly understand
how iron condors (or any other strategy) work.
The study, «Performance Analysis of CBOE S&P 500 Options - Selling Indices,» is the first comprehensive study that examines the performance of options - strategy benchmark indexes that
incorporate iron condor and -LSB-...]
That means no complex naked call writing, bear ratio spreads, calendar puts, bear calls, long straddles, strangles, guts or short butterfly or
reverse Iron condor or butterfly or box spreads.
Most iron condor traders prefer to have positions that expire in the front month (options with the least time remaining before they expire).
The 530 call is more than 5 % out of the money, but it has a 37 delta, and that's outside the comfort zone of
many iron condor traders.
I know that real money is not at risk, but if take the positions seriously, you can determine which
iron condors leave you a bit uneasy and which «feel» ok.
And if you are unsure of how your comfort zone is defined, use a paper trading account to practice
trading iron condors (or any other strategy).
We'll cover our favorite strategies to profit even when stocks are falling
like iron condors, strangles, etc..
You goal should be to
find iron condors that places you well within your comfort zone.
The trade was originally remnants of
an Iron Condor we put our on October 21, 2014.
Investors who use
the Iron Condor technique buy the lower spread and sell the upper in the hope of making significant profits.
When there is uncertainty about the direction in which the market will go, some experts recommend using Nadex spreads and
the Iron Condor strategy to trade options.
Option traders know combinations with funny names like «
Iron Condor» or «Butterfly», but you're not limited to them.
Options comes with its own vernacular — covered calls, selling puts, the strike price,
iron condors, etc. — and that requires some getting used to, but it's not like learning how to split the atom.
Books Gavin Mentions: Bullshit Free Guide to
Iron Condors - Gavin McMaster The Bible of Options Strategies - Guy... [Read more...]
His favorite is
the Iron Condor, and he has also written a book on that particular style of trade.
Jacob Mintz uses trades that range from straight call / put purchases and buy - writes to more sophisticated strategies such as credit / debit spreads and
iron condors to guide investors to quick profits while controlling risk.
I prefer to begin my life as
an iron condor owner with spreads that are equally far out of the money.