Wednesday, January 18th, 2017

IRON CONDORS- whats an Iron condor?

An option strategy used by professional traders and is a purely income generation tool. Iron condor is named such because it carries protection and a guaranteed outcome with high probability of success. The risk/ reward ratio in a IRON CONDOR is not what an investor is looking for but the high probability of success of the outcome. Nothing works better as tool in income generation as this option strategy.

IRON CONDOR consists of two spread  one Bear spread and one bull spread. A net credit is obtained and the condor is sold, till it expires or is closed. The distances of the strikes from the price of the index is carefully evaluated to maximize returns

Iron condor makes money primarily via time decay. Because the investor is a premium seller, time decay ( theta) works in your favor and therefore a sideways or neutral markets works the best. An IRON CONDOR makes the most money when the underlying remains in between the short strikes chosen and expires worthless.



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