Murthy, where is it that I heard that trading iron condors is like picking up nickels and dimes off the street in front of an approaching steam roller?
RFH
--- In OptionClub@yahoogro
>
> Thanks Rob. For some reason, iron condor is "taught" most often - you win 10
> times out of 12 and the 2 times you lose, it wipes all your profits. But in
> the name of "income" and "selling options" and "collecting premium" ... oh
> well.
>
> And any adjustments you make, takes away the little "credit" you get from
> the initial entry.
>
> Murthy
>
>
>
> On Mon, Nov 2, 2009 at 6:15 PM, drrobhansen <robhansen5252@
>
> > Murthy, from what I remember, he didn't do the adjustment at the threatened
> > wing at a particular short option delta. He looked at the credit from the
> > initial position and somehow decided how much he was willing to sacrifice to
> > extend the break evens with the butterfly adjustment. I have a great
> > article from SFO magazine which also has a method of iron condor
> > adjustments. This is well worth the read.
> > http://www.sfomag.
> >
> > Dan Sheridan likes to look at the short option deltas with his high
> > probability condors when determining the proper adjustment point. I believe
> > he will initiate the position with a delta around 10 and adjust when the
> > short option hits 20. It seems that the butterfly will cost less than if
> > you wait until the delta reaches the high 20's and certainly the 30's. You
> > can also increase the number of contracts on the threatened side in an
> > attempt to maintain the initial credit, but the cost of the trade (margin)
> > increases proportionally (along with the risk). There are probably as many
> > iron condor adjustment techniques as there are iron condor traders!
> >
> > RFH
> >
> >
> > --- In OptionClub@yahoogro
> > >
> > > In general, did he go over WHEN to do these adjustments?
> > >
> > > Murthy
> > >
> > > On Tue, Oct 27, 2009 at 4:20 PM, Ricky Jimenez <rickyjim@> wrote:
> > >
> > > > The first type of adjustment he presented was the familiar widening of
> > > > a condor by adding a butterfly at the wing. Sorry, but I wasn't
> > > > paying close attention when he presented the second adjustment. Can
> > > > anybody supply what it was? I remember that it had positive delta but
> > > > would be a loss at the wing if held to expiration, so if the
> > > > underlying kept going higher you could close the entire position or
> > > > just the call side for a profit.
> > > >
> > > >
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