Profiting with Iron Condor Options: The Horse Race
- Too Good to Be True
- Introduction to Trading
- How Options Work
- The Horse Race
- Buying Versus Selling
This chapter is from the book
This chapter is from the book
This chapter is from the book
An iron condor is a complex options trade that creates a "zone," as illustrated in Figure 1.1, in which a profit occurs over time and within a specific price range. Correctly picking the direction of price movement is not necessary. Understanding the dynamics involved in the trade is the key to long-term success and limited risk.
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Figure 1.1 S&P 500 Index chart
Too Good to Be True
Too many people trade options without knowing about the range of risks they face, or without first acquiring the knowledge they need. This book addresses that problem with respect to condor trading. Nonetheless, condors are lucrative and you can create profits quite easily; but you can also lose money in a condor trade. Condors are the most consistently profitable trade you can create, with potential annual returns reaching 30%, 40%, 50%, or more if put together correctly.
Just as there are different ways to play chess, there are different strategic methods for trading options. This book presents a conservative strategy designed to maximize gains and minimize risk.