Where can I find instructions on the correct way to use a straddle?
Straddle Instructions Please
timelord914
#2
If you go to the News Trading Plan Page http://apexinvesting.net/news-trading/
Scroll down and you will see the News Trading strategies instructions for each trade type (see image below).
Peter
Hi Peter This question is about the Iron Condors I was testing the trades and when I pulled up the tickets for the put and call I noticed they were very expensive; the risk was much greater than the payout. Is this normal for the Iron Condor? Nanci Quinnear
timelord914
#6
Yes, very normal. Keep in mind that Your margin risk is not necessarily your actual risk. Most of us who do Iron condors will go for a 1:1 Risk to reward and we will use the stop trigger to get us out when it reaches that. So if your reward for the Iron Condor is $60, you want to set the stop triggers to close the losing side when price hits that level. There is an Iron Condor Straddle calculator that I use to help determine exactly where I should set my stops. If you do choose to use that tool, pay attention to the 1:1 stop loss risk price compared to max risk price. In times of high implied volatility you can sometime have enough premium that your max risk is beyond the floor and ceiling of the contract and you would not need a stop loss because you can’t lose money beyond those on spreads.
Here is the link to the tool http://apexinvesting.net/straddlecondor08252014/straddlecondor08252014.htm
Peter.