Trading the Iron Condor
There is a little known option trading system known as the iron condor technique.
It is a method that profits when the market remains relatively stable.
As long as the market stays within 2 predetermined price points that you select, your options will expire and you will make money.
It is not uncommon for traders to make 10% or more per month trading this technique.
However, this is easier said than done.
Many times, with iron condor options, the price will move in unexpected ways, thereby threatening the positions you put on.
It is in these cases that the true veteran who is familiar with iron condor secrets will differentiate himself from the amateur.
An experienced trader can make certain adjustments to the iron condor position, and if these adjustments are made at the correct time, they can sometimes even end up making the trader more money than would have been possible in the initial trade.
One critical mistake that many options traders make is that they sit on a position too long without adjusting it, or they hold the position into expiration week.
This generally is not recommended as expiration week carries a lot of risk to the position with relatively little reward.
A better tactic used by the pros is to take off the position a few days or even a week before the expiration date.
Sure, that leaves some profits on the table but the last thing you want is for your positions to move against you with just a few days left to expiration.
This is a bad position to be in as the options are losing value fast, and you are unlikely to be able to make any meaningful adjustments to your position when you are that close to expiration.
Recently, trading iron condors have become more popular as people have begun discussing this method in various option trading education sites.
While a lot of people are lured to trading iron condor options due to its high potential profit, the technique is a rather complex one, and it is important for one to get the proper knowledge and expertise before trying out this method.
It is a method that profits when the market remains relatively stable.
As long as the market stays within 2 predetermined price points that you select, your options will expire and you will make money.
It is not uncommon for traders to make 10% or more per month trading this technique.
However, this is easier said than done.
Many times, with iron condor options, the price will move in unexpected ways, thereby threatening the positions you put on.
It is in these cases that the true veteran who is familiar with iron condor secrets will differentiate himself from the amateur.
An experienced trader can make certain adjustments to the iron condor position, and if these adjustments are made at the correct time, they can sometimes even end up making the trader more money than would have been possible in the initial trade.
One critical mistake that many options traders make is that they sit on a position too long without adjusting it, or they hold the position into expiration week.
This generally is not recommended as expiration week carries a lot of risk to the position with relatively little reward.
A better tactic used by the pros is to take off the position a few days or even a week before the expiration date.
Sure, that leaves some profits on the table but the last thing you want is for your positions to move against you with just a few days left to expiration.
This is a bad position to be in as the options are losing value fast, and you are unlikely to be able to make any meaningful adjustments to your position when you are that close to expiration.
Recently, trading iron condors have become more popular as people have begun discussing this method in various option trading education sites.
While a lot of people are lured to trading iron condor options due to its high potential profit, the technique is a rather complex one, and it is important for one to get the proper knowledge and expertise before trying out this method.