For all the investors out there who can't pick market direction to save their lives, here is a good trading strategy worth considering: it's called the option greeks Iron Condor Option Strategy. This trade is ideally suited for non trending markets, however it can also product great results in a moving market just as long as the investor who is trading this strategy understands it thouroughly and has been properly educated on how to work the trade and most importantly how to correctly adjust.
This is a spread that takes advantage of theta decay in options - the fact that options are a decaying asset and lose value over time. Once an iron condor trade is placed, and expiration day approaches - as long as the 'sold' strikes of the position are placed far enough outside of 'harms way', these trades can normally expire worthless giving the iron condor trader a substantial return in a very short period of time.
Iron Condors are actually constructed from 2 separate credit spreads - one on either end from where the underlying be used is currently trading at. Positioned above the underlying current trading price is a bear call spread. Positioned below the current trading price is a bull put spread. Depending on the broker being used, these can be placed separately as individual vertical spreads- or together as one iron condor trade.
The goal of the trade is for the underlying to stay contained within the 'range' created by the two sold credit spreads. While the trade is on, the underlying can move around on the chart as long as it stays contained within this 'range'. It the underyling beings moving around too much, or moves too far in either direction, the trade will become threatened and the trader will need to take some sort of action to manage and/or adjust.
This type of trading strategy provides a very high probability of success - and can be profitable most of the time. However, it is important to note that the risk to reward ratio of these trades are NOT ideal - as one losing month, if not properly managed, can wipe out an entire years worth of gains. Learning how to set correct profit targets, exit and stop loss points, as well as gaining the appropriate knowledge on how to properly manage and adjust an iron condor position that is getting into trouble is vital to long term success with this trade.
When I first began trading this strategy, I found myself winning month after month - UNTIL - suddenly I hit a bad month and wound up giving everything back and then some - simply because I didn't take the time up front to properly learn how to manage and adjust.
This is exactly what happened to me when I first started trading the option greeks iron condor strategy - and I had to learn this lesson the hard way through taking a large painful loss to my own account. Had I just taken the time to learn the risk management and hedging techniques taught at this iron condor training website, I could have avoided much of this trading pain.
This is a spread that takes advantage of theta decay in options - the fact that options are a decaying asset and lose value over time. Once an iron condor trade is placed, and expiration day approaches - as long as the 'sold' strikes of the position are placed far enough outside of 'harms way', these trades can normally expire worthless giving the iron condor trader a substantial return in a very short period of time.
Iron Condors are actually constructed from 2 separate credit spreads - one on either end from where the underlying be used is currently trading at. Positioned above the underlying current trading price is a bear call spread. Positioned below the current trading price is a bull put spread. Depending on the broker being used, these can be placed separately as individual vertical spreads- or together as one iron condor trade.
The goal of the trade is for the underlying to stay contained within the 'range' created by the two sold credit spreads. While the trade is on, the underlying can move around on the chart as long as it stays contained within this 'range'. It the underyling beings moving around too much, or moves too far in either direction, the trade will become threatened and the trader will need to take some sort of action to manage and/or adjust.
This type of trading strategy provides a very high probability of success - and can be profitable most of the time. However, it is important to note that the risk to reward ratio of these trades are NOT ideal - as one losing month, if not properly managed, can wipe out an entire years worth of gains. Learning how to set correct profit targets, exit and stop loss points, as well as gaining the appropriate knowledge on how to properly manage and adjust an iron condor position that is getting into trouble is vital to long term success with this trade.
When I first began trading this strategy, I found myself winning month after month - UNTIL - suddenly I hit a bad month and wound up giving everything back and then some - simply because I didn't take the time up front to properly learn how to manage and adjust.
This is exactly what happened to me when I first started trading the option greeks iron condor strategy - and I had to learn this lesson the hard way through taking a large painful loss to my own account. Had I just taken the time to learn the risk management and hedging techniques taught at this iron condor training website, I could have avoided much of this trading pain.
About the Author:
To understand these 'tricks' to trading the option greeks , head over to this iron condor site and see my free video. It will teach an extremely uncomplicated method for suitably placing, managing, and ADJUSTING these types of trades.
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