Option Trading Articles: Re: [ConservativeOptionStrategies] GDX High Prob Iron Condor

Sunday, November 29, 2009

Re: [ConservativeOptionStrategies] GDX High Prob Iron Condor

You arre getting most of your income from the dangerous end of the condor -- the call end in this case.

Conservative investors in condors have been going for "wide" condors on SPY and its ilk making $40 to $60 on $2000 margin ($20 strike spread) with 99+% probability. You can easily check these using the tools at Options House. You can make more by adjusting closer to expiration. I would argue that 2 to 3% per month with 99+% probability is awfully good for a "conservative" investment.

--- On Sun, 11/29/09, zmostatabi@aol.com <zmostatabi@aol.com> wrote:

From: zmostatabi@aol.com <zmostatabi@aol.com>
Subject: Re: [ConservativeOptionStrategies] GDX High Prob Iron Condor
To: ConservativeOptionStrategies@yahoogroups.com
Date: Sunday, November 29, 2009, 9:52 AM

do not swim against current. openning Put wing is more realistic.
..

-----Original Message-----
From: drrobhansen <robhansen5252@ hotmail.com>
To: ConservativeOptionS trategies@ yahoogroups. com
Sent: Sun, Nov 29, 2009 8:59 am
Subject: [ConservativeOption Strategies] GDX High Prob Iron Condor

I'm considering opening up a conservative iron condor in the gold miners index
(GDX). A condor with the shorts at between 10 and 15 deltas and wings 4 srikes
away will give you a 91% chance of the price staying above the short put (44),
and an 87.75% chance of staying below the short call (57). If you are more
bullish on gold between now and Dec expriation, you can shift the whole thing up
to 58 calls and 45 puts for just about the same credit. 20 contracts will give
you gross profit of just shy of $1000. This is a 14% return on margin.

A peak at the chart of GDX shows a very revealing trend channel which remains
valid back to last December! It's an incredible chart which you can see by checking out this link:

http://users. anet.com/ ~hansen2/ GDX%20Daily. jpg

Any comments welcome. Glad to see things flowing again in this group.

RFH