Bullshit Free Guide to Iron Condors - Options trading IQ

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WHEN TOO OPEN IRON CO ONDOR TRADES BASED ON VOLATILITY LEVELS Some peeople see volatilit ty as a huge risk in the markets, and a it is true, especially with iron condors. A sharpp spike in volatilitty is usually associated with a sev vere selloff. Inn this case your iron condor is goi ing to get hit twic ce, once from the e price of the undderlying moving and secondly froom volatility spiking. Still, iron condor traders sshouldn’t fear vol latility, they shou uld embrace it and learn to love it like a best friendd as it also provides opportunities for significant prrofits. When voolatility shoots th hrough the roof during d a market panic, p Iron Condo or traders can gennerate significantt amounts of preemium. When vollatility drops back to normal leevels, Iron Condo ors begin to generate profits due to t their negative Vega. During thee course of a tradde, there are fourr ways volatility caan move: 32
From the above table, you can see that there is only one situation out of the three that poses a danger. From this you might deduce that in a low volatility environment it might be prudent to have some form of protection from a volatility spike. The absolute best scenario is that volatility starts high and finishes low. Volatility starting low and starting low, or starting high and staying high is also a good scenario for Iron Condor traders. Market panics are not normally something that regular investors enjoy. Iron Condor traders, however, come to love them and actually look forward to them. Homework Assignment: Evaluate current levels of volatility in comparison to the last 12 months. Is volatility in the bottom third, middle third or top third? What would be an appropriate portfolio allocation based on current volatility levels? Homework Assignment 2: Did you know there are many different volatility indexes other than the VIX? These days a lot of indexes and even stocks have their own volatility index. Find the symbols for the following volatility indexes and stocks and add them to your watchlist. RUT, NDX, AAPL, GOOG, GLD. I’ll give you a hint – RUT’s volatility index is RVX 33
Page 1 and 2: BULLSH*T FREE GUIDE TO IRON CONDORS
Page 3 and 4: Table of Contents Connect………
Page 5 and 6: CONNECT WITH OPTIONS TRADING IQ Fac
Page 7 and 8: WAY too many index calls for my exp
Page 9 and 10: TRADING AS A BUSINESS The most impo
Page 11 and 12: CHOOSING AN OPTIONS BROKER Whether
Page 13 and 14: TRADINGG JOURNAL CRE EATIN NG A TRA
Page 15 and 16: WHAT IS AN IRON CONDOR The Long Iro
Page 17 and 18: PUTTINGG IT ALL TOGETHE ER Placing
Page 19 and 20: WHY IRON CONDORS ARE THE BEST STRAT
Page 21 and 22: Overview IRON CONDOR TRADING PLAN T
Page 23 and 24: Money Management Rules Rules for Le
Page 25 and 26: ENTERING TRADES IN YOUR BROKERAGE A
Page 27 and 28: For what it's worth my preferred me
Page 29 and 30: WEEKLY IRON CONDORS Another variati
Page 31 and 32: Date: Deecember 12, 2012 2 Strategy
Page 33 and 34: ADJUSTING IRON CONDORS Despite what
Page 35: VOLATILITY IS YOUR BEST FRIEND Lear
Page 39 and 40: To now wwork out the Pro ofit and l
Page 41 and 42: HOW TO CALCULATE ROI ON IRON CONDOR
Page 43 and 44: MANAGING THE RISKS One of the first
Page 45 and 46: • If you use a Stop Limit, you sp
Page 47 and 48: 10% of the monthly income I am gene
Page 49 and 50: TOTAL NET CREDIT RECEIVED = $940 Th
Page 51 and 52: position. However, if the Flash Cra
Page 53 and 54: Very interesting here what a 20% ri
Page 55 and 56: WHAT ABOUT THE RISK OF EARLY ASSIGN
Page 57 and 58: OTHER THINGS TO CONSIDER REGARDING
Page 59 and 60: RECOMMENDED READING There are a cou

Bullshit Free Guide to Iron Condors - Options trading IQ

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