Three questions regarding selling iron condors

[IAlwaysWin]

So I’ve been wanting to do an iron condor sell for a while now but I have a few questions that i can’t find answers to online

1. I know your supposed to sell iron condors when implied volatility is high, but if I’m selling IC based on the assumption that prices will not move then is it ok to sell ic when Iv is low? Not super low but maybe iv rank 20 or above at least.

2. I want to only hold the trade for maybe three to four days on the week of the weekly options expiration (possibly execute on Monday and take profit/loss Thurs or Friday). Is this a good idea? Theta does rapidly increase on the days before expiration which I thought help get me get quite abit of the profits. Or would it be better to sell ic two weeks out of expiration but closing it on the first friday? ( I’m a short term trader which is why I prefer to only hold for a few days or a week at the most.)

3. Almost every blog post or video online explains what an ic is or how to sell one but none of them go through the practical application of FA or TA to decide what to sell ic on. I found my own strategy that I wanted to try out but I was wondering if anyone can give me a little insight on what they use to decide when to sell ic on?

Thanks in advance!

In my opinion, Iron Condors are to much risk and not enough reward. I may be wrong but wouldn't trading a breakout on a daily experation yield better results by lowering risk and increasing reward? On top of freeing up your day.

 

[TheBigShort]

In my opinion, Iron Condors are to much risk and not enough reward. I may be wrong but wouldn't trading a breakout on a daily experation yield better results by lowering risk and increasing reward? On top of freeing up your day.

Is it working for you?

 

[IAlwaysWin]

Is it working for you?

I trade intraday contracts mainly but my strategy holds a very similar success rate on the M5, M15, 60M and the daily experation. I have time to trade on week days so I gravitate toward shorter time frames. 60M is more stable for people with little free time or a day job.

 

[El OchoCinco]

Most Iron Condors are set and forget strategies so I am not sure why it would tie up your whole day doing them... In fact monthly condors are sold by services to newbies as a means for passive income with little to no work haha.

 

[IAlwaysWin]

Most Iron Condors are set and forget strategies so I am not sure why it would tie up your whole day doing them... In fact monthly condors are sold by services to newbies as a means for passive income with little to no work haha.

Okay thanks for the lesson. I'll be looking more into Iron Condors then lol

 

[farcis]

You can argue that selling IV low or high gives the same risk:reward since higher IV (more volatile moves in underyling) justifies the higher priced contracts you are shorting. I suspect OP is learning from Tastytrade or Option Alpha like I used to. IV Rank is something they mention a lot.

thats exactly right. And I noticed today that most of the high iv trades I was looking at are near earnings, which is quite scary if you ask me.

 

[marameo]

What you might want to do instead of selling weeklys to their expiry, is sell your ICs 3-4 weeks out, and hold them for 1 week. Harvest, Rinse&Repeat. Think in terms of (Margin) Capital slots, used on a rotating, max$return/day minRisk basis.

So if I want to buy a straddle or slightly strangle I should focus on near expiration rather then 30 days?

Thanks

 

[tommcginnis]

So if I want to buy a straddle or slightly strangle I should focus on near expiration rather then 30 days?

Thanks

I only rarely ever buy, and usually on the trending side. I have done a strangle maybe once a quarter, and only on a lark, and with money I planned on losing. I can't even tell you what my net over time is. I'm either selling time, or (very little in the past few years) scalping ticks.

 

[Windlesham1]

forget that this is an options strategy -do the simple maths. Your reward is say 15,your risk 35( a 50 point wide spread). You win the first 4 trades but lose the next 2. Got it? R/R does not often work for ICs these days,and desperation will make you chase rubbish premiums

 

[destriero]

ICs are maligned as a lazy strategy. Yes, a fly will make more on vega, no surprise. ICs are useful traded against long combos (straddles) and in isolation as a path-ind alternative to a DNT. I could name specific examples, but it's self-evident.