Iron Condors

[gkishot]

Quote from MTE:

Yes, I do trade them. I lost money on them last year, about 5-10%.

One more clarification: Your lost about 100% of your IC risk capital last year, right?

 

[MTE]

Quote from SmithTheTrader:

This means you can only get blow up if you loss 10 times in row ? You seemed really conservative

Actually, no, if I lose 10 times in a row I would still have about 35% of the intial amount. I keep the percentage at risk constant, which means that as I lose I will reduce the size of my positions.

Sorry to disappoint you.

 

[MTE]

Quote from gkishot:

One more clarification: Your lost about 100% of your IC risk capital, right?

In some months I did.

 

[SmithTheTrader]

Quote from MTE:

Actually, no, if I lose 10 times in a row I would still have about 35% of the intial amount. I keep the percentage at risk constant, which means that as I lose I will reduce the size of my positions.

Sorry to disappoint you.

What you do for the rest of your 90% cash ? sitting in your broker account ?

 

[MTE]

Quote from SmithTheTrader:

What you do for the rest of your 90% cash ? sitting in your broker account ?

I didn't say that I trade iron condors exclusively.

 

[gkishot]

Quote from MTE:

It would be the max loss in an IC, which is the difference between the short and the long strike less premium received.

For example, say I got a $100K account. I sell a 10-point (10 points is the distance between the long and the short) IC on the SPX at 3 points. Since I'm willing to risk 10% of my account, I can sell 14 spreads (10% of 100K is 10K and my risk per spread is 700).

MTE, do you trade ICs exclusively with european style options?

 

[MTE]

Quote from gkishot:

MTE, do you trade ICs exclusively with european style options?

Yes.

 

[donnap]

OP, you're getting advice from somewhere around 100 years options experience. Spin and dagnyt alone have 50+

Good, sound advice you're getting but there is a drawback.

Legging in or at any other point of the trade involves risk management - as has already been noted. The veterans know this intuitively, but if you are unfamiliar with the strategy, then the moves to make may not be obvious, indeed many will go unnoticed.

It's a good idea to keep in mind at any point of the trade that there are ways to manage risk, increase or decrease - always with an eye on the bottom line - profit.

Be smart about it and learn. You can turn losers in to winners - or the reverse if you're not careful.

 

[arizonadreamer]

Quote from donnap:

OP, you're getting advice from somewhere around 100 years options experience. Spin and dagnyt alone have 50+

----------------------------

I'll second that, although it makes it sound like Spin and dagnyt are trading from the retirement home.

These guys are the real deal.

AZD

 

[spindr0]

OP, you're getting advice from somewhere around 100 years options experience. Spin and dagnyt alone have 50+

Hey Donnap. LTNS. FWIW, I've got nearly 30 years under my belt, dabbling with options. But only 2 of them were good (g). And no pointing at below the belt and laughing!