Iron Condors (The Best Option Strategies)

Iron Condors is the third book in the “Best Option Strategies” series that offer a hands-on education for some of the most useful option strategies. It is intended to be very different from all other books you may have read that discuss this versatile option strategy.

Introduction:

One popular idea is that iron condors can be used to generate a steady monthly income stream. Although there is truth to that idea, it is a vast oversimplification. Iron condors do provide an income stream for disciplined traders who understand (a) the importance of risk management and (b) how and when to trade iron condors.

If you have been led to believe that iron condors are a ‘set it and forget it’ strategy, I will try to get that idea out of your head. These positions require careful monitoring, and the frequency depends on the specific options that comprise the iron condor. It is never a position to initiate and then ignore.

Most iron condors – at least the type that I recommend as suitable for the majority of traders –require some active decision making as long as the position remains in your portfolio. Sometimes that decision requires action to reduce risk. At other times, the decision will be to do nothing and continue to hold. But make no mistake, deciding to hold is a real decision – not to be made lightly.

Another decision involves a pre-planned (I encourage the preparation of a trade plan for each trade) exit to lock in the profit. As the trade progresses, and when the position is working and profits accumulate, it becomes a daily decision: hold or exit. It is important to avoid being greedy; it is important to recognize when there is just too little remaining profit potential in the trade to warrant holding. That is where the trade plan, and the target profit, can help you become a disciplined trader.

Closing the position may be easy and pleasurable, such as when you earn the target profit before expiration arrives. However, it could also be a gut-wrenching decision that locks in a loss and is made because it is essential to take some risk-reducing action for a position that has not worked as planned. Expect to learn the basic concepts of trading iron condors:

• How to decide which options are suitable for your iron condor. There is no single ‘best’ position that suits all traders.
• Ideas on how to manage risk.
• Figuring out when to exit. We’ll discuss the pros and cons of locking in profits quickly (not a good idea) vs. holding longer (but not too long).

Contents:

• Some of the Finer Points
• The Iron Condor
• The Winning Iron Condor Mindset
• Iron Condor Theory & One Trading Rule
• Steady Monthly Income
• Iron Condors in a Rising Volatility Environment
• Navigating the Bid/Ask Spreads
• Trading Screens
• Items to Consider when Trading
• The Put Spread
• The Call Spread
• Choosing the Underlying Asset
• Choosing Strike Prices
• Choosing the Spread Width
• Choosing the Expiration
• Deciding when to Exit
• Basic Risk Management
• Advanced Risk Management
• Advanced Risk Management: Examples

Iron Condors (The Best Option Strategies Book 2) By Mark Wolfinger pdf