Question: Step by Step Iron Condor 8-3-2016

#1

Question: Am I understanding this correctly?

Youtube Video : https://www.youtube.com/watch?v=aZ4v9ldKBhQ&feature=youtu.be Time Stamp: 18:10

Parameters:

  1. Holding to expiration

  2. Expected Range 240 - 4 hours

  3. Enter at 7am

  4. Announcement at 10:30

  5. Expiration 11:00am

He is offsetting because of: a. the way the indicators works: b. Trade parameters

  1. Offsetting to move forward 3 hours - 180 mins
  2. Why: Because it is expiring at 8 am when we need it to expire at 11 am
  • moving fwd 3 hours
  • Instead of starting block at midnight
  • need to start at 3 am; offset
  1. The Indicators are being setup for an expected range during for a 4hr TF increments.
  2. Based on the video the Indicators begin at a midnight; starting point
    • 12am -4am
    • 4am-8am
    • 8am-1 am
  • Based on the Video the instructor is saying that it is expiring at 8am. I am assuming it is the 2nd TF of the expected range. He will offset (fwd) by 3hrs - 180 mins

  • instead of starting at midnight it starts at 3am: Therefore: 3am-7 am

    7am-11 am

  • Therefore the 2nd four hour time frame (7am-11am):

a. starts at 7 am

b. based on the video the announcement is at 10:30 am

c. Expiration 11 am

Question: Am I understanding this correctly?

#2

I believe you got it . If looking to use the spread from 7-11, you want to know what is the expected move from 7-11 timeframe and what is the expected move / hostorical move of the news announcement ( if any) to know if you have an Iron Condor set up that will work and not blow right past your stop plan during that time frame.

#3

Thank you skeltonmark more questions to come…on this same thread…

#4

I need some clarification on how it is that a profit can be made on an Iron Condor (an I.C is the opposite of a straddle)

It is my understanding that to make money on an I.C when the market does not have to move. (55:50)

If I am understanding this

a. You get into the sell trade at 720

b. There is already $20 of premium

c. In this example there is NO movement in the market

d. The market settles at 700

c. You make $20 at expiration because of the $20 premium going into the trade.

Therefore, if there is no movement to make $20 of premium at expiration that would have to mean that

a. WHen You get into the sell trade at 720

b. From (entry) of the sell trade to (expiration) the market remained at 700 because it never moved.

c. If this is the case this what was referred to as a neutral trade?

In retrospect:

a. Time has to go by to make money on premium?

b. This type of trade has to expire? No early exits?

Am I understanding this correctly?

Next, if money is made on premium because there was not movement in the market when you get an email from NADEX after every trade where does it show that a profit was made on premium?

Fact or Fiction: As long as the market stays between 700 and 720 at expiration the $20 premium remains?

#5

Next Question:

Instructional video Break Even concept: 1:02:52

Reference:
upper 700/720 sold
lower 700/680 bought


For what ever reason I am having a real hard time understanding this.


So that the math adds up this is what I think I am understanding:

(in order for the math to add up the starting point has to be at the trade entry)

 1. Based on the video if the price moves from:

a.  720 (entry) to 740 (exp) this would equal = Break even on the upper spread
b.  Meanwhile as the price from the lower spread (bought) moves from 
    680 (entry) to 700 (exp) that equal = 20 pips/ticks plus in the right direction.

2.    Therefore:
a.  You breakeven on this upper spread
b.  You make $20 on the lower spread and
c.  Profit $20

3.  To take it a step further in order to get an overall Breakeven trade Apex experience.
a.  If from the entry, price, were to move another 40 pips/ticks and expire
- upper all the way to 760 (exp) or
- lower all the way to 640 (exp)
b.  This would result in a break even overall.

Therefore:

760--- if the upper spread movement goes up another 20 pips or ticks; break even over all 
750
740---B.E upper sold spread; will profit $20 because of the
           lower (bought) spread moving upward 
730                                                                 
720---sold (entry)
710
700-----------
690
680---bought (entry)
670
660
650
640




Conclusion: this is why it is an over all 80 pip wide Break Even Trade...(103:00 ish)

Apex, I welcome your comments. ###
#6

I looked through all your posts and it seems like you have it down, with the exception of the last one. If you sold for 720 and the market went against you and settled at 740, you would be negative 20 bucks. Now, if there was 20 dollars of premium when you got it, so the market was at 720, but you sold it for 740, and the market settled at 740, then you would break even.