Option Trading Articles: Re: [ConservativeOptionStrategies] Re: Iron Condors

Friday, February 26, 2010

Re: [ConservativeOptionStrategies] Re: Iron Condors - Conservative Strategy?

I too like condors, but find that if you are "too safe" the return is too low or the broker wont take your offer. As you go far OTM, the difference between the bid and ask becomes large and sometimes, what should be a credit is a debit. Generally on idices, it is easier to sell the put spread than the call spread. I have had mber of condor tries that have become put credit spreads because the call side screwed up the trade.

Power Options sells condor spreads. They start wide and then adjust to improve the premium. Option Genius also sells spreads and he is often a little saggressove amd requires am adjustment to protect himself.

ote:

From: StanG <asahi3@hotmail.com>
Subject: [ConservativeOptionStrategies] Re: Iron Condors - Conservative Strategy?
To: ConservativeOptionStrategies@yahoogroups.com
Date: Friday, February 26, 2010, 5:45 PM

Hi, OptionsMike,
It's quite difficult to trade with rules like - "1. Make sure the sold call on both sides of the condor are quite far out of the money". Mainly because it's pretty meaningless. It should be something much more concrete like - 1)"at least one Standard Deviation from the live price." or "having a Delta of .02 or less" or "having a probability of 80% of closing below (above, depending on side) that strike". Also 2)the market should be in a non-volatile state. 3)The strikes on the Credit Spreads should also be one, to at most three apart. This is to control somewhat the effects of Delta. It is probably better to trade the IWM versus the RUT because the RUT strikes are ten points apart. The trade off is more contracts for a given return i.e. more in commissions but easier to adjust if required.
Have a good week-end, Folks...
Stan

--- In ConservativeOptionS trategies@ yahoogroups. com, "optionsmike" <michael@... > wrote:
>
> Hi Tom,
> In my opinion, iron condors can indeed be a conservative options strategy especially with the following three caveats in mind: 1. Make sure the sold call on both sides of the condor are quite far out of the money, 2. find a range-bound stock or ETF without too much volatility, and 3. keep you commissions rock-bottom low. Hope this is useful to you.
>
> Michael
> www.safe-options- trading-income. com
>
>
> --- In ConservativeOptionS trategies@ yahoogroups. com, Tom Clark <tec@> wrote:
> >
> > Are Iron Condors considered enough of a conservative strategy for
> > discussion here?
> >
> > If so than I can only assume that some readers of this group may use
> > IC's. I am considering expanding my use of options to include Iron
> > Condors and I'm looking for a mentor. I'm not looking for someone to
> > teach IC's, I've got the general idea, I just want someone with whom
> > I can bounce trade ideas off of and who might just keep me form going
> > off the deep end. All of this would be off-line from the group. If
> > interested drop me a private email.
> >
> > Thanks
> >
>