Iron condor option strategy pdf


The course includes an excellent PDF for reference and over 7 hours of video with live trades. The course is not a theoretical example of how to trade, it is how The Lazy Trader trades. Because of his practical experience trading the strategy, Henrik is able to offer insight into both the mechanics and psychology of trading his strategy.

Very simple, very boring. Simple and boring is good. It lets you have a life, especially if you have a day job. The course is geared towards people who have a basic understanding of options trading. I think the real value in the course is for people who have been trading options for a little while and are struggling with consistency or developing rules for a strategy. The course gives you some great rules to follow for adjustments and position sizing without excessive risk.

Many books and courses cover what a particular spread looks like, but they almost never give you a plan to trade the strategy. Do yourself a favor. I was not compensated for this review and receive no monetary benefit if you purchase LT Options. Wow Dan, this review was totally unexpected.

I am really glad that a trader like you found the information to be really actionable and useful. Coming from you I really appreciate this review, and it is good that you pointed out that you are receiving no monetary compensation from it.

Your singularity of purpose and consistency is what makes the material so valuable. Thanks again for sharing the course with me! I completely agreed with your excellent review. LT Options is an excellent course taught by one of the best and most consistent spread traders you will ever find. Henrik, will you include the adjustments you made in late August as a supplement to your course as the trades in the LT Options was done when market was very calm? As for inclusion of new material after the crash.

A new chapter was included with a trading technique to effectively deal with these type of events. It is good for obtaining a smooth equity curve in the long run no matter what he market throws at you.

As for the inclusion of my own trades during this period, I thought about it but really there was nothing new.

Because the long, plain Condor and Butterfly combine a debit spread with a credit spread, that overall position is instead entered at a net debit though usually small.

One of the practical advantages of an iron condor over a single vertical spread a put spread or call spread , is that the initial and maintenance margin requirements [2] for the iron condor are often the same as the margin requirements for a single vertical spread, yet the iron condor offers the profit potential of two net credit premiums instead of only one. This can significantly improve the potential rate of return on capital risked when the trader doesn't expect the underlying instrument's spot price to change significantly.

Another practical advantage of the iron condor is that if the spot price of the underlying is between the inner strikes towards the end of the option contract, the trader can avoid additional transaction charges by simply letting some or all of the options contracts expire. The difference between the put contract strikes will generally be the same as the distance between the call contract strikes.

Because the premium earned on the sales of the written contracts is greater than the premium paid on the purchased contracts, a long iron condor is typically a net credit transaction. This net credit represents the maximum profit potential for an iron condor. The potential loss of a long iron condor is the difference between the strikes on either the call spread or the put spread whichever is greater if it is not balanced multiplied by the contract size typically or shares of the underlying instrument , less the net credit received.

A trader who buys an iron condor speculates that the spot price of the underlying instrument will be between the short strikes when the options expire where the position is the most profitable.

Thus, the iron condor is an options strategy considered when the trader has a neutral outlook for the market. The long iron condor is an effective strategy for capturing any perceived excessive volatility risk premium , [3] which is the difference between the realized volatility of the underlying and the volatility implied by options prices. Buying iron condors are popular with traders who seek regular income from their trading capital. An iron condor buyer will attempt to construct the trade so that the short strikes are close enough that the position will earn a desirable net credit, but wide enough apart so that it is likely that the spot price of the underlying will remain between the short strikes for the duration of the options contract.

The trader would typically play iron condors every month if possible thus generating monthly income with the strategy. An option trader who considers a long iron condor is one who expects the price of the underlying instrument to change very little for a significant duration of time. This trader might also consider one or more of the following strategies. To sell or "go short" an iron condor, the trader will buy long options contracts for the inner strikes using an out-of-the-money put and out-of-the-money call options.

The trader will then also sell or write short the options contracts for the outer strikes. Because the premium earned on the sales of the written contracts is less than the premium paid for the purchased contracts, a short iron condor is typically a net debit transaction.