Before Trading Iron Condors, Understand These 3 Concepts
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Outstanding for advanced traders, backed by solid studies. I use these principles even when not trading condors. I have mostly been doing bear credit spreads because the premium is on the call side now. Haven’t had a position challenged in a month or so, just cashing out 50% within 13 days or less. Made approximately $3750 last month with very little at risk because trades kept closing relatively quickly, 1-13 days. Stay disciplined, I always put in a gtc close 50% immediately after opening trade fills. Even before I log my trade. Also, this helps keep track of trades, one will see all open trades and what one could close for at the moment. For me indispensable.
That's awesome, are you available to chat? I'd love to pick your brain.
@@josephhamilton1 as long as not a bot or scammer:)
we're you opening your trades at 30-45 DTE and closing 1-13 DTE 50% of profit?
@@edmandell3064 usually 42 days, if it doesn’t close in 21 days I usually roll out for a credit.
Thanks for the explanation of the value in widening the strikes. That alone was worth the watch.
That chart was very helpful. Especially the part of going 1 wide vs. 20. Thanks
hello
how do you define the wide of iron condors wing?
what should to be the max delta for buying leg 5 delta or 2 delta?
thank you
What is the preferred range of IV (lowest to highest) for a successful Iron Condor play?
How about ATM with an even 10 delta strike at both the short call/put and tight SL say -150% of credit received till expiration, would this be a much safer risk with higher win rate in a much longer term run? Of course no more 1/3 premium from the spread.
How can a Put below the current stock price be called Out of the Money (OTM)? I keep watching videos on Options from many channels and the contradictory terms and methods are SO confusing. OTM means above the price, INT means at or below the stock price, ATM is the stock price or one above one below. So is this all wrong?
a put is out of the money below the underlying price because it has no intrinsic value. the same could be said about a call that is above the underlying price. a put is the right to sell at a certain price, a call is the right to buy at a certain price. nobody will want to sell below market price, that's why a put below underlying is OTM. Nobody wants to buy above market price, that's why a call above underlying is OTM.
Chris is right - if you want another way to to think about it try this: In The Money means profitable, OTM means unprofitable. To profit from a put you need the stock to go DOWN. If I buy a put at $200 and the stock is $205 I need the stock to drop below $200 to make money, and the farther the better. if you are more visual pull up your brokerage service, pick a put option below the stock price and look at the P/L graph. You'll see the profit zone below your put and the loss above it.
"In the money" simply means where you are profitable for that call or put.
Great video.
Thanks
With IC management, are you managing them at 21 days and 50% profit , which ever comes first?
You manage at 21DTE if you need to. If they position is worth 50 percent at any point you close. The 21DTE is to protect you from I believe gamma and vega risk of a stock position while also staying relatively liquid so you can get better fills.
We have the same birthday, cool. 😎
My perspective is that in High IV a short Iron Condor is a good play . When IV is lower wouldn't a Long Iron Condor play well? I think they only spoke to the short Iron Condor in this video.
Why do you manage the trade at 21 days? It seems most of the extrinsic value is still on the table. In fact, what about a strategy of selling Iron Condors on morning of day of expiration (DOE) and just collecting theta, buying back before end of day (EOD)? If it fails, get out at 1.5X max loss. BY selling at day 45 and waiting, it seems like just waiting for something bad to happen and very little profit.
(* I should say 1.5X max profit.)
One issue is Pattern Day trading if you have less than $25000 in your account. I like 0DTE IC's.
@@kirkking6601 Yup. It seems to work but can get dicey and require management mid-day. I try to close the position before 3pm Eastern time when it tends to go nuts.
The data shows the mechanics of profit making are maximized when the trade is placed at 45DTE and managed at 21DTE according to the tastytrade process.
I think the benefits is being able to take those profits and open up another trade. On top of that, managing at 21 reduces your risk exposure to a black swan event
How to trade iron condors: DONT
What is wrong with them
a lot of people are having trouble with defined risk trades in the current choppy market (myself included). just tough to make money on them right now
@@ryanmocerino7698 i agree
I exclusively trade Iron Condors to keep from getting margin called. Wishing I’d closed them when SPY was at 415. Held for penny’s and got rug pulled.
Depends, you can play earnings with it
Can’t stand the way they explain options so damn confusing - beginners move on much better channels to learn them