Simpler Trading – Trading Iron Condors Using Stocks
Description of Trading Iron Condors Using Stocks
An iron condor is an options strategy containing two puts (one long and one short), and two calls (one long and one short), all with different strike prices – but the date of expiration.
The iron condor setup earns maximum profit when the asset closes between the middle strike prices at expiration. This strategy attempts to profit from low volatility.
The condor strategy and the iron condor are extensions of the butterfly spread and iron butterfly, respectively.
As a delta-neutral options strategy that profits the most when the underlying asset does not move much, the strategy can be modified with a bullish or bearish bias. Like an iron butterfly, an iron condor is composed of four options with the same date of expiration: a long put further out of the money (OTM) and a short put closer to the money, along with a long call further OTM and a short call closer to the money.
Profit is limited to the credit received, while potential loss is limited to the difference between the bought and sold call strikes and the bought and sold put strikes—less the net premium received.
What will you learn in Trading Iron Condors Using Stocks?
- Learn how to use the strategy that provides an edge by being neutral
- Take your trading to the next level with our online trading courses, like Trading Iron Condors for Income on Stocks.
- With over 200 years combined experience on our trading team, you’ll learn more than you ever expected, from successful
- trading strategies to trading psychology. At Simpler Trading, our trading education specializes in options, futures, and crypto trading
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