Iron Condor Best Instrument

misterkel said:
How far out are going at entry? 3 months?
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Yeah. With Tesla, if the price moves 40-50 bucks you have to close out the winning side and write a vertical another 40-50 bucks away on the losing side. Chances are the price will move back, but if not, the price moving a full 100 bucks is small right now.

https://www.elitetrader.com/et/threads/iron-condor-on-tsla.310322/#post-4516060

The first IC I posted in June kept the full amount of premium after 3 months, the price closing only $25 away from the mid-point. The second I posted a month ago is up 20%.
 
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Pekelo said:
Yeah. With Tesla, if the price moves 40-50 bucks you have to close out the winning side and write a vertical another 40-50 bucks away on the losing side. Chances are the price will move back, but if not, the price moving a full 100 bucks is small right now.

https://www.elitetrader.com/et/threads/iron-condor-on-tsla.310322/#post-4516060

The first IC I posted in June kept the full amount of premium after 3 months, the price closing only $25 away from the mid-point. The second I posted a month ago is up 20%.
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I"ve looked at TSLA. The IV is definitely higher than the movements, imo, over the longer term. As in most securities. I'm pretty sure TSLA's earnings IV is WAY higher than the post earnings moves. You might look at shorting the weeklies right before earnings with the longer term options to hege for more juice from the trade.

I've never done IC's cause the R/R just makes my stomach hurt, but the probability of winning makes it look really nice for income. And many successful traders do it. I'm still working out my system and my instruments.
 
I believe that over time, it makes sense to do IC on indexes like RUT and SPX. Can it work on individual stocks? Absolutely. We just closed FB IC for 30%+ gain, and we also playing the range in TLT. But you need to identify specific edge in stocks, and it is not an easy task.

There might be currently an edge in TSLA, but I still believe that playing it through earnings is too risky. It is true that on average, options are overpriced before earnings. But it doesn't mean that from time to time, they won't move more than expected. And when it happens, there is nothing you can do to control risk, like in indexes.

Here is one example:

How NOT To Trade NFLX Earnings
 
I've never done IC's cause the R/R just makes my stomach hurt,
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Depends on how you set it up. Speaking of NFLX and earnings, I sold a straddle IC (177.5/180/180/182.5) on it with the 180 strike as middle. My max. loss is minimal, I think $160 but the max. gain is 2K. Now that is some R/R!!

(When I sold it I wasn't even aware of the coming earnings, but that is for another day.) Now NFLX is at 200, but I could still close the IC with very little loss. Anyway, we shall see after Monday...
 
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