![]() ![]() The total payoff turns out to be positive on 4.2 points. So we made money on the initial positions that we booked by Selling the options but we lost them on the positions that we booked for protection. between the price of INR 300 and INR 350. In case the stock doesn’t bounce much and stays between my booked positions i.e. I will be taking the following positions: Here is the option chain of YESBANK for the expiry date of 28th March 2018. Last 1-month stock price movement (source – Google Finance) Let us see how we can execute this strategy in a live market scenario.įor this, I will take the Option for Yes Bank Limited (Ticker – YESBANK) with an expiration date of 28th March 2018 and the current stock price of INR 323.40 But, due to the risk of unlimited loss, we would protect our positions by:Ĭollectively these four positions will form the Iron Condor for us: With a hope that the price will remain within these two strike prices that we booked so that we make a profit. ![]() Let us assume that a stock ABC is trading at a price of INR 100, to execute an Iron Condor trading strategy we will: Lower side: Strike Price of Short Put - Net Premium Received How does this strategy work? Upper side: Strike Price of Short Call + Net Premium Received Strike Price of Short Put - Strike Price of Long Put - Net Premium Received Strike Price of Long Call - Strike Price of Short Call - Net Premium Received It is important to understand that Iron Condor strategy is a limited risk strategy and works best in a stable market with low volatility which can help the trader to earn limited profits. Hence, to protect this risk the trader buys further out-of-the-money put and call, these four options are together called as Iron Condor strategy. But shorting options can involve a lot of risks and any unfavourable situation can result in a tremendous loss. The trader will hope that the stock price stays between these positions at the time of its expiration. For people who are familiar with other basic Option trading strategies, Iron Condor strategy is basically a combination of the bull put spread and bear call spread Option trading strategy.Īnother simpler explanation for those who are not aware of the above-mentioned strategies is that Iron Condor strategy is a four-legged trade that starts with selling out-of-the-money put and selling out-of-the-money call for the same underlying security and expiration date. Iron Condor strategy is one of the simplest strategies that can be practised by traders even with a small account. One such strategy that can make the time decay work in your favour is the ‘Iron Condor’. A lot of strategies that are being practised are designed with an objective to have the time factor work for them rather than the other way around. This time I will cover the Iron Condor trading strategy.Īnyone who trades in Option is well aware that they are constantly fighting against time decay, especially when you are on the buy side. If you are new to options trading then you can check the options trading for dummies free course on Quantra. This book will give you that deep and usable level of knowledge about one of today’s most well-proven option condors.I have been trying to cover some of the simplest Option strategies including the Options Strangle Strategy and the Bull Call Spread Strategy which can be easily practised by traders who are new to Options. Traders who focus on a specific type of trade have a history of outperforming stock pickers and directional investors. You’ll learn how to profit in the sideways markets where condor options are most widely used-and also in extreme-trending markets that offer their own surprising opportunities. You’ll learn how to handle real-life market dynamics that can dramatically impact results, including rising and falling volatility, changing bid-ask spreads, and distorted call parity. ![]() Benklifa-who manages $10+ million in condor trades each month-shows you exactly how to run these trades and earn these returns, delivering all the details you need to master every nuance of this remarkable strategy.īenklifa shares option condors examples using market realities, not oversimplified abstractions. ![]() Market experts use option condors to consistently earn monthly returns while trading conservatively and staying in the market as little as possible. The objectives are make 2%-4% a month staying in the market as little as possible. In a straightforward approach, Hanania Benklifa provides readers the practical knowledge needed to trade options conservatively in Profiting with Iron Condor Strategies from the Frontline for Trading in Up or Down Markets. ![]()
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