Iron Condor Best Instrument

[misterkel]

What is the best instrument for selling Condors at about a month or so out right now?

 

[atrp2biz]

Anything that has a high IV relative to your expectations of future realized volatility.

COST has already reported earnings but I find its IV still relatively high. I'm currently short the November 155 straddle. A 145/150/165/170 IC is currently -1.19@-1.15.

 

[atrp2biz]

I just realized you want to sell an IC. My example is for buying an IC.

 

[Pekelo]

TSLA. Check out my thread about IC on TSLA. Its price reached an equilibrium, shorts can't push it down much, longs can't push it up, it has been in a range. Sell the 350 midpoint IC.

 

[misterkel]

TSLA. Check out my thread about IC on TSLA. Its price reached an equilibrium, shorts can't push it down much, longs can't push it up, it has been in a range. Sell the 350 midpoint IC.

But that would cross earnings. doesn't seem too risky?

 

[Pekelo]

But that would cross earnings. doesn't seem too risky?

I guess good point, but if you read Seeking Alpha, we already know what to expect. Elon will lie, then if the stock tanks, he would introduce the semi later on and the price goes back where it was...

 

[stevegee58]

Trading iron condors on anything except broad indexes is playing Russian Roulette. Inevitably the stock will gap past your max loss point and wipe out a year's worth of nickle gains.
"Eats like a bird, shits like an elephant."

 

[misterkel]

Trading iron condors on anything except broad indexes is playing Russian Roulette. Inevitably the stock will gap past your max loss point and wipe out a year's worth of nickle gains.
"Eats like a bird, shits like an elephant."

That's odd math - most IC's go in at $5 spreads and target .2 deltas. Net is usually above 20% of total risk - ie, $1+. Which means you have to win 80% + of trades to be net positive. That means a gap will wipe out 4 months of gains.

Generally, I agree, but index IV is SO low right now that SPY IC's feel like R. Roulette to me.

 

[Pekelo]

I like ICs where the payoff/risk ratio is close to 1, so no, it won't wipe out anything. Also the last time I posted the TSLA IC it was 100 dollars wide, so gap away!

 

[misterkel]

I like ICs where the payoff/risk ratio is close to 1, so no, it won't wipe out anything. Also the last time I posted the TSLA IC it was 100 dollars wide, so gap away!

How far out are going at entry? 3 months?