In depth questions on credit spreads.

K

klurby

How do you guys prefer to put on your short iron condors? Do you put the position on as a whole package or do you do the short call spread and short put spread separately? What stop loss strategy do you guys have in place if the equity/index moves the wrong way? How much room do you guys give your self between the short leg strikes and the equity/index price at the time of the trade execution? Thanks everyone.
 
I don't trade IC's but put protected strangles.

I prefer to put them on as a package.

I manage risk when position delta exceeds predetermined levels. I'll use a risk reversal on the upside, covering my short call and selling long put. I buy strangles back on the downside.
 
well that's a mouthful. I execute in 2 strangles - long the wings first then short the gut. Seems to get filled faster that way in my experience, usually I am on mobile so need the fill asap and cant play around with the order. And if you doing short ic, just flip long the gut first then short the wing.
 
Quote from klurby:

How do you guys prefer to put on your short iron condors? Do you put the position on as a whole package or do you do the short call spread and short put spread separately? What stop loss strategy do you guys have in place if the equity/index moves the wrong way? How much room do you guys give your self between the short leg strikes and the equity/index price at the time of the trade execution? Thanks everyone.
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Generally, I put them on as a single spread order, however occasionally I may split them up, depending on market conditions.

My stop-loss strategy is fairly simple, I exit the position when the market price doubles. So, for example, if I sell an IC @ 3.5, then when it hits 7 I get out.

As to the width of the range, it's not a fixed number, but rather a dynamic thing depending on volatility and various other factors at the time of the trade.
 
Quote from MTE:

Generally, I put them on as a single spread order, however occasionally I may split them up, depending on market conditions.

My stop-loss strategy is fairly simple, I exit the position when the market price doubles. So, for example, if I sell an IC @ 3.5, then when it hits 7 I get out.

As to the width of the range, it's not a fixed number, but rather a dynamic thing depending on volatility and various other factors at the time of the trade.
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What is your profit target?
 
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