Need Details of Iron Condor Strategy

#1

Hi, i’ve searched around this site but cant find any detailed instructions on how to do the iron condor. Is there a video with a brief intro to how to set one up or perhaps a page I might of missed which details the steps? If not can someone please explain step by step how to do this. Thanks ahead of time for any response.

#2

http://apexinvesting.net/forum/news-trading-nadex-64/iron-condors-spreads-598.html

#3
  • i walked through a straddle versus a iron condor in detail on this recent radio show archive.
#4

If you don’t understand spreads start on this webinar: http://youtu.be/P3uNFINl4Sg

#5

Thanks, ill go thru this information.

#6

Hi Darrell, I have watched these videos on Iron Condors a couple times and have seen you mention them frequently on your radio show. I grasp spreads and straddles, but struggle with executing IC’s correctly. As an example, I was hoping that you could post a screen shot of the two spreads that you would pick for an IC on the Spread Scanner. (Just want to see what an Iron Condor looks like on the scanner so that I can visualize).

Thank you!

#7

A iron condor on the spread scanner would have higher risk and lower reward on both sides where the floor and ceilings touch each other.

Note a perfect example but this gives you the idea…

05.15.2014-01.20.png1091x847

After fees $100 combined profit on both sides in this example so if TF moved up or down about 10 points = 100 ticks or $100 i would be breakeven (ie say i lost $50 (5 pts/50 ticks against me) on one side the other side would make max profit of about $50 (5 points/50 ticks) covering the loss. anything less than that and I am making money as of expiration. Max profit is about $100 (combined max profit of both). So TF would have to move 20 points up or down for a max loss and expire there.

#8

Thanks for the reply Darrell. Next question I have is do we sell the upper and buy the lower on this particular example, OR do we simply buy upper and sell lower since they are DITM and ITM? On a different note,…Is inverting a typical OTM straddle an example of an Iron Condor as well? My assumption is that to execute an IC you have to sell the upper spread and buy the lower spread no matter if OTM, ITM, or DITM. Is this correct?

Thanks again for your help!

#9

Yes on an iron condor you are selling the upper spread and buying the lower spread. Ideally you want th emarket to be as close to the center of the two spreads as possible (ie at the ceiling of the upper and floor of the lower). Not really concerned with ITM/OTM/DITM so long as its close to the center and the max profit is acceptable between the two different spreads.