Wednesday, November 23, 2011

Aggressive and Conservative Iron Condors

By Donald Scott


The "Iron Condor" is a negative Vega option spread, meaning that it benefits when the IV on the underlying traded is going down. This usually happens if the underlying price is rising. Right now the market is somewhat bullish. With a negative Vega spread needed, this could be the right time to use the "Iron Condor" strategy, but make sure that the IV still has room to drop. If IV hits support, then watch out because it might just rise on you and this will really hurt the Condor.

In the last few months, I have been making money on the stock market with very little effort or making adjustments at all. This is definitely one thing that the "Iron Condor" strategy can give during the times when the stock market is not moving up and down a lot. Through the "Iron Condor" option trade, you can make money almost every day when the market is very quiet. If skillfully managed, the "Iron Condor" is the type of option spread that will make money as the underlying, or asset to be bought or sold, settles within a stiff price range.

Do you want to have time to relax, savor the splendor of life while making money on the stock market almost every day without much work? Alas, this can be done with the "Iron Condor" strategy. How wonderful life is when the market is giving you such an opportunity to make money with less work. Watch out though for this is not happening all the time. One thing certain is that it is possible some times when the market is calm.

I have discovered a more conservative way of dealing with the "Iron Condor" option spread being taught by San Jose Options. And I like it much better than what's being taught by other courses. I learned a much more aggressive approach to "Iron Condor" option trading from others and later found out that I was only taking higher risks of losing my money in the trade. I had to make a lot of adjustments on my trades and so often that it eventually caused a problem when the market was frequently moving up and down. I later realized that with this aggressive approach to the "Iron Condor", all I ever got was more stress, more trading adjustments, more headaches, and above all- overall losses.

Through this new conservative approach to "Iron Condor" option trading, I have been getting a clean 10% for the past few months. Yet on top of it all, I haven't had to make many adjustments at all in my trades. I have been able to let my trades and my money work for me. Gone are those times when I have been making several adjustments every week through more aggressive ways in trading this option spread. With this new trading technique, there is not one single moment when the market ever hit my point of adjustment. And believe me; I am absolutely enjoying the stock market and my trading at this very moment.




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