Quote from volatilitypimp:
Let's say I write an iron condor on $XEO. It costs me 40K in margin for the month and I have 10K of my own capital in the position. So it costs me 30K x .0025 = $75/day x 30 days= $2,250. Let's also assume I earn $1 per spread so I make 10K at the end of the month.
So, instead of 10K/40K=25% return it comes to 10K-2,250 or $7,750/40K=~19% return (barring no adjustments less any commission). Hmmm...If I get paid 100% payout, this doesn't sound too bad I guess.
Actually, if I have 10K in my own $$$, then the return is 7,750/10,000 or ~78% return for the month(less fees & commish). Now that's more like it.
Okay, I've decided this is a good deal, carry on then.