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Why I Trade High Delta Iron Condors | Option Strategies
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- เผยแพร่เมื่อ 8 ก.ย. 2022
- The lower the delta your short strikes are, the higher your probability of profit with Iron Condors. However, that means you're bringing in less credit, which means less profit relative to your margin. I'm usually willing to trade some of the probability of profit for a higher profit return in hopefully the same amount of time.
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The lower the delta your short strikes are, the higher your probability of profit with Iron Condors. However, that means you're bringing in less credit, which means less profit relative to your margin. I'm usually willing to trade some of the probability of profit for a higher profit return in hopefully the same amount of time. It's something I will often go back and forth on when deciding which Iron Condor I want to run, and also something I'm looking to one day grow out of. How about you guys?
Iron Condors are not my favorite. I look for other trades over the IC so not much input on them.
I want to deploy an IC on daily movers on daily movers for precapital companies that have moved due to news, but don't have any earnings or other news expected for trade duration. My theory is that many stocks that experience these news trades tend to fluctuate minimally after the newfound high for a relatively standard ammount of time. What other metrics do you think I should consider before entering and exiting the trade?
I like my condor wings to be far OTM. And I like SPY...but I either take profit 50% or Stop loss 8%...Goal is to win 3/4 out of 5 trades a week with a goal of 6% return on my capital a week. Is this a good strategy?
@@edmandell3064 I’m not an expert on ICs yet, but your strat sounds interesting. How many DTEs do you use?
Only time I'd do a higher delta IC (.25+), would be ODTE when I'm fairly confident the price is going to be stable, but if I'm trading IC's out in the 3-7DTE, I go .10 - .16. You still get good premium. 5 contracts of SPX will still be around $1,200-1,400 per day with a max loss around $4,000 or slightly less. With 0DTE, I'm usually looking to close out at 50% profit anyway. Anything else, I'm usually looking for 80-85% profits.
Hi, great video! One questions/critique, when you describe the profit difference between your two iron condors, the spread in each wing was different, so since you collected, notably, more money on the iron condor with the larger spreads, one would expect that the profit would be larger on that one than the other, where you collected less to start out with. Had not thought about skewing the wings differently as you were doing to change the Delta, So I will need to study and think about that a little bit more. But thanks for the great perspectives!
Best explanation of Iron Condor strat I have found. Thanks!
Dude, I love the explanation on vega delta trade offs and credit gainz, high underrated content right here
I like the way that you talk about, and practically apply the Greeks. There is not much of that on the Internet, at least that I have run across. There may be some theoretical, but it’s usually applied to only like one option, not the Greeks of a spread. I would like to see a lot more of that if you were looking for ideas for videos. Thanks!
Great video!, thanks for putting the work in on this - quick question: How do you like to defend or adjust when market approaches any of the strikes?.
Was looking for an wide OTM iron condor SPX video an this hit the door. You helped me finally run some scenarios jn tastytrade to see the possibilities of putting strikes at resistance and support. Should have looked at this a long time ago. Thanks
You've got to give yourself more credit. You know more than enough to trade options successfully. There's no perfect entry point or trade.
TO each his own. I prefer low delta iron condors and works well for me.
It has taken a while but I'm finally getting more comfortable with low delta Iron Condors as I know over the long term they have a higher probability of success.
Great video. Thanks for posting
Hi there, great video! I am in the middle of taking in a lot of IC ideas and made my first 2 IC trades earlier this week (small wins!). One thing I feel like is missing from this video is the width of the wings, I don't think its mentioned once and it plays a big role in the risk : reward management. What wing width are you putting on these spreads? I am also watching the tasty guys/gals quite a bit and they talk a lot about 3:1 risk:reward w/ closing at 50% max profit, and if I'm deciphering info correctly here you are often placing 4:1 trades w/ closing at 25% profit (is that right)? Cool to see different takes on this strategy, often that sweet spot of 3:1 with wide enough wings can be hard to find.
Interesting video. I really thought that you were going to discuss high delta IE higher than 50 deltas. Recently I've been doing in the money iron flies at 65 to 70 delta. When it moves in your direction, although it's a directional trade your Theta decay is much higher as in the money options have negative Theta when you first start them but when they become at the money all of the Theta that was borrowed comes to fruition. You are also risking 1:5 verses risking 3:1 when you sell out of the money. Would love to discuss more I have been doing this for a couple years now. I think it would be an interesting discussion. Let me know how we can be in touch
I trade iron condors for a living. If making reapeatable and reliable income is the objective, then low delta is a must. If you are trading for thrills and not income, low delta condors may not be for you.
I started doing the same from couple of weeks. I have been using 10 -15 Delta ICs on SPY, QQQ and SPX 1 DTE everyday. what do you trade and what are your DTEs?
@@user-ht7jt2gr5j I trade IC's 30 to 45 days out max 8 Delta, usually a 6 or 7 Delta. I trade SPX,SPY,QQQ, and some large stocks.
@International Playboy -- great! We both have same deltas, same underlyings, only thing we are doing different is DTE. I do 1 DTEs. You are doing longer.
@@user-ht7jt2gr5j Yes, best of success to you in your trading!
@@internationalplayboy8685 Thank you. Would like to connect with you on a zoom call & learn more, if you are open to it.
Hi, nice video. What do you think about the Tasty Rules of collecting 1/3 of the width of the wing on IC? Ex. 5$ wing -> around 1.6$ credit.
Isn’t it the total spread of the wings? Like if each was $5 wide then you would look to collect $3.3 (10*1/3)…anyway, I’m wondering the same. I haven’t heard anyone talk about That other than tasty
Thanks! Very interesting
Very interesting video mate 👌🏻 . In your non conventional IC on SPY, what happens if the underlying price breaches one of your short ? Do you get assigned?
Its possible with American style options, but European style options can only be exercised at expiration. An index like SPX (which he is trading in this example) or RUT is European style, and cash settled, so there is no assignment. A lot of people who trade ICs trade an index. Most traders will also exit the trade if the short strike has been crossed, as it is an indication that the trade is not going to be profitable, and danger of reaching max loss is increasing.
@@wboquist Thank you
What is your approach to limiting your losses? Do you just close when "x" happens? If yes, how would you close out the trade when it goes against you?
Depends on the spread and the DTE, a 50 point wide ATM 0dte Iron Butterfly when the VIX is higher than 25 will get a different treatment than a 45 DTE .10 delta Iron Condor and even more different from a 30 pt wide 1 DTE OTM long butterfly for example. The Long butterfly has much lower odds of success so I'll use much less margin and willing to accept a much larger percentage on the loss because I"m looking for an outsized return. A 0dte Iron Fly I might just be looking for +3% return on margin I'll try to avoid a drawdown greater than 6%. The 1 DTE OTM long butterfly I might be risking 60% of the position but could be looking for over 150% return. A 45 DTE Iron Condor I might be aiming for 8% return on margin so will give it room and willing to accept a over a 14% drawdown as there's plenty of time to adjust and for the trade to work out.
I like your content bro
Thank you . what about 1DTE iron conder or Duble Digonal ? do you have any strategy about that?
Do you have one on a calendar spread?
Is there something important to look out for trading SPY instead of SPX?
With SPY, you can be assigned/exercised at any time. SPX options go to expiration and are cash settled. SPY also does not have the tax treatments of SPX.
The title of this video contains the words "high delta" and none of these trades have high delta. 0.15 delta is not considered high.
Scam. Doesnt answer questions
Sorry I didn't get back to you in time.
Bryant…how can I contact you to get signed up. Do I need a twitter account? I tried your email but never heard back
Hi Mark, sorry about that I'm very behind on emails. I have responded to a couple Marks, just not sure it one of them was you.