Thursday, April 7th, 2016

Iron Condor Options

Are Option Strategies Are Most centered around making the right call on the direction of a stock. This approach relier on the accuracy of guessing the direction of the stock. Thus the chances of Profiting Are low. By using a combination of Bull and Bear Credit Spread, an Iron Condor Can Be created position. It Will Have Higher Risk and minimal probability of success. With Iron Condor, You Do not Need to guess the direction of stock. This strategy is Mostly Used When We Have a neutral outlook on the Movement of the Underlying security options. It’s a good idea to Implement this strategy on security (stock) with low volatility, Not Because Their price tendon to move much. Usually Iron Condors is Who Used by traders seek Their Income from trading capital. They will construct the posistion so That it will still much more profit for a price Movement. For example if the current price is $ 40, INSTEAD OF Creating a position Where It will profit When the price moves up / down $ 10 (price entre $ 30? $ 50), trader dog create a position WHERE I CAN still profit When the price moves up / down $ 20 (price entre $ 20? $ 60). By using this strategy, trader Would generate monthly income. Since it is from a combination of bull put spread and a bear call spread, You Need to Understand Them first. The bull put spread is Implemented by selling an in-the-money (ITM) put option (has high price) and BUYING an out-of-the-money (OTM) put option (have lower price) on the Same Underlying stock with The Same expiration date. While the bear call spread strategy is Implemented by selling an in-the-money (ITM) call option (you have high price) and BUYING an out-of-the-money (OTM) call option (have lower price) on the Same Underlying stock with the Same expiration date. Both bull put spread and bear call spread has limited profit and Risk.

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