Before Trading Iron Condors, Understand This Study

[@frowe2049]

Good content. Would be helpful to newer options traders to see examples on a P/L chart. Show setup examples and thenshow what happens when you do the things you listed as managing mistakes. Take two trades (one tight spreads - one wide spreads) and run them side by side.

[@Professor.Joe1]

Is there a difference in Theta decay between wide spreads vs. Narrow Spreads?

[@1968laugro]

Why not just define a width spread using a percentage of underlying value?

[@RussAbbott1]

An interesting strategy for challenged spreads is to roll the short position and leave the long position.

[@Brayness]

But if you’re willing to use that extra margin requirement, you probably would be already using undefined risk

[@RussAbbott1]

@@Brayness Since the long position still exists, the margin requirement doesn't change -- until the long position expires.

[@Brayness]

@@RussAbbott1 From what I see on the Tastyworks platform right now, if you have a long put expiring Oct 6th and a short put expiring Oct 20th(for example), the margin requirement is equal to the naked put position and not reduced by the long option to the width of the strikes

[@劉祈洺]

It's a cool strategy. 👍

[@motorradvoyager]

Does it ? As this will be reverse on diagonal , where you are short away strike in near expiry and long near strike with far expiry. How margin will stay same ? Sorry for my ignorance but curious to know

[@chrisbianchi8876]

What about doing dollar wides overtime as the market moves, not all at once?

[@RussAbbott1]

I typically pick a spread size that maximizes the return per dollar of required margin. Most often the max rate of return occurs with a relatively small spread -- not the minimal spread but close to it. Changing the spread size generally makes a *big* difference with respect to the rate of return.

[@mikerobertson5919]

What number do you use for return? Could you do return per BPR?

[@RussAbbott1]

@@mikerobertson5919 I use: (NetLiq/RequiredMargin) * (365/DTE)