Iron Condor - Help

Sang Froid

Well-known member
344 60
Hi all,

I'm new to the world of options trading and setup an iron condor this morning daily due to expire today. When I got into the position it started -£9, now with about an hour left it's only -£5.80 despite being well within the range? Please can someone explain where I've gone wrong as I have no idea now.

condor2.PNG
condor1.PNG
 

Sang Froid

Well-known member
344 60
So that expired with a loss of £1.80 despite being well inside the range? I thought the idea of an iron condor is to choose a ranging instrument, sell a put option at (x) buy a put option at (x) just underneath the sell and the same with call options and wait for time decay to do it's thing, as long as the price remains inside those bounds you make a profit?

Have I missed something?
 
G

guest41766

0 0
cost of the spread between bid and offer of option has taken the profit into a loss
 

Sang Froid

Well-known member
344 60
cost of the spread between bid and offer of option has taken the profit into a loss
Thank you, I had a feeling it may have been this, I've tried to setup another few iron condors this evening but the spread is prohibiting any kind of profit on IG Index which is quite annoying. I might try some other things, wondering if I could set up some kind of synth condor using S&P 500 and Dow.

Anyway, thanks for the reply.
 
G

guest41766

0 0
try trading straddles or even cheaper trade strangles
 
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Sang Froid

Well-known member
344 60
try trading straddles or even cheaper trade strangles
Thank you for the tip, 16 delta strangle certainly looks interesting

edit, I think from what I have breifly read a strangle you still have to have some directional bias where as a straddle though more expensive benefits from volatility rather than direction so this I think suits me a little better.
 
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BeDutch

Junior member
11 2
Nothing against millenials. However I would,d suggest to first learn the basics, however boring that may sound. Learning the basics, even when using a program where you pay for the program like Options Animal ( disclosure I am a lifetime member and would get a referral fee if you were to mention my name ( BEK at 183mtoption.com ) or a free much less in depth program like FREE Option Alpha, is well worth it and pales with the to be expected AVOIDABLE LISSES when trading before you have the basic knowledge. Trading equities with illiquid options ( I.e. wide bid ask spreads) should be avoided, particularly for multileg strategies. Secondly and relevant fir this thread, if your aim us to be edit from theta decay, rather than direction, you should let TIME do its work I.e. no DAY-TRADING. ONE EXCEPTION TO THAT. see next reply
 

BeDutch

Junior member
11 2
The one exception to the no daytradi g suggestion for non directional strategies like Iron Condors, straddles and strangles are Zero DTE far OTM ICs check the comprehensive presentation on this strategy on you tube, or drop me a note so I can forward the presentation
 

Windlesham1

Well-known member
470 41
Sadly RobinHood makes day trading calls viable -as the a**holes at the Treasury and FED will not stop the money printing, creating a debt mountain that their kids and grand kids will have to pay back for decades.
 

BeDutch

Junior member
11 2
The one exception to the no daytradi g suggestion for non directional strategies like Iron Condors, straddles and strangles are Zero DTE far OTM ICs check the comprehensive presentation on this strategy on you tube, or drop me a note so I can forward the presentation
Help me understand why it is Robinhood who makes DAYTRADING calls viable? Or are you simply talking about the technical viability, as opposed to systematic profitable trading?
 

Windlesham1

Well-known member
470 41
Help me understand why it is Robinhood who makes DAYTRADING calls viable? Or are you simply talking about the technical viability, as opposed to systematic profitable trading?
In a normal trading account you need to show you are a competent trader and you need margin- some accounts need $100k. As I understand it with Robinhood as they are only buyers of calls, their losses are limited to their premiums paid. The effect of them buying calls en masse, however, is to ramp up a stock without needing to own the stock -and in a market that has all but outlawed a drop it's game on for these 'people' .
 
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