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

Saturday, February 27, 2010

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

Dave - Reverse IC -- You buy two debit spreads instead of selling two credit spreads.

Eg:

Buy GOOG Mar 540 call @ - 4.70

Sell GOOG Mar 560 call @ + 1.20

Buy GOOG Mar 510 put @ - 4.00

SELL GOOG Mar 490 put @ + 1.50

Net Debit - 6.00 = Max Loss........... Max Gain = 14.00.

This would be predicated on your view that in three weeks, GOOG will be trading either above 560 or below 490. Eg, like perhaps a major earnings announcement due shortly, which you expect to be a real surprise.

Hope this helps.

Dom

--- On Sat, 2/27/10, Dave Baglia <dbaglia@yahoo.com> wrote:

From: Dave Baglia <dbaglia@yahoo.com>
Subject: Re: [ConservativeOptionStrategies] Re: Iron Condors - Conservative Strategy?
To: "ConservativeOptionStrategies@yahoogroups.com" <ConservativeOptionStrategies@yahoogroups.com>
Cc: "ConservativeOptionStrategies@yahoogroups.com" <ConservativeOptionStrategies@yahoogroups.com>
Date: Saturday, February 27, 2010, 12:10 PM

I'm new to the group and would like to understand reverse IC's? I currently do CS's (credit spreads) and IC's on indexes like RUT, NDX. ... etc. Would you please explain reverse IC's?

Thank you,

Dave

Sent from my iPhone

On Feb 27, 2010, at 12:56 PM, Ricky Jimenez <rickyjim@bestweb. net> wrote:

I have been posting recently in the Options Club, Yahoo group, with
headings containing "Reverse Iron Condor" or "Reverse IC". If you
say that puting on an IC, is buying, then putting on a reverse IC is
selling that possition. I think that results so far show that one
more likely to make money if you bet than an IC will lose money. Last
month I paper traded reverse ICs in GOOG, APPL, IBM, RIMM and IWM and
alll were profitable, averaging 22.32% profit over the original debit,
even though no modifications were made while holding the positions.