Learning To Trade Like A Proi
The Iron Condor is a commonly used stock option trading approach that employs two vertical spreads, a Bull Put Spread and Bear Call Spread that are positioned so that they both have the same expiration. In this strategy, the number of put spreads is the same as the number of call spreads.
If you are an expert in day trading, you will be familiar with these terms. A newcomer, you will need to learn and master these techniques to help you become successful. The Iron Condor term resembles a condor, with tis wide wing span. Inner options are like the condors body and the outer body resembles the wing span.
Positioning of the spread is where the origin of Iron orginated. Spot pricing is placed abroad the underlying item. The item consist of a spread that is vertical and below the above spread. Many strategies adopt this technique, but because the strategies are a bit different is what defines the Iron Condor strategy.
There are two types of Iron Condor options trading a"the short Iron Condor and long Iron Condor. The short Iron Condor trading technique is an approach where a trader will trade or buy long options contracts for the inner (body) strikes. These strikes are both out-of-the-money strikes. In succession with the buying of long options, the trader will sell options contracts for the outer (wings) strikes.
The Long Iron Condor has a slight difference from the Short Iron Condor. Day Traders buy long options from the outer wings and strike. This frees up the option to be sold for the inner body. The results are the same as the Short Iron Condor and are out of the money.
With the many advantages that the iron condor brings, one of the most important are that the initial maintenance requirements are for a single veritcal spread. The advantage here is two net credit premiums and a potential profit that extends beyond other techniques.
Another advantage is that further transaction charges can be prevented by letting the options contracts to expire. This is a direct result from the positioning of the spot price of the underlying line being between the inner strikes near the tail of the option contract.
The benefits obtained by adopting the Iron Condor strategy is that these commonly used techniques are used and taught to students in an attempt to learn day trading. As these are slight modifications of other condor techniques, The Iron Condor has many more advantages if adopted by a more advanced day trader with its many options available.
If you are an expert in day trading, you will be familiar with these terms. A newcomer, you will need to learn and master these techniques to help you become successful. The Iron Condor term resembles a condor, with tis wide wing span. Inner options are like the condors body and the outer body resembles the wing span.
Positioning of the spread is where the origin of Iron orginated. Spot pricing is placed abroad the underlying item. The item consist of a spread that is vertical and below the above spread. Many strategies adopt this technique, but because the strategies are a bit different is what defines the Iron Condor strategy.
There are two types of Iron Condor options trading a"the short Iron Condor and long Iron Condor. The short Iron Condor trading technique is an approach where a trader will trade or buy long options contracts for the inner (body) strikes. These strikes are both out-of-the-money strikes. In succession with the buying of long options, the trader will sell options contracts for the outer (wings) strikes.
The Long Iron Condor has a slight difference from the Short Iron Condor. Day Traders buy long options from the outer wings and strike. This frees up the option to be sold for the inner body. The results are the same as the Short Iron Condor and are out of the money.
With the many advantages that the iron condor brings, one of the most important are that the initial maintenance requirements are for a single veritcal spread. The advantage here is two net credit premiums and a potential profit that extends beyond other techniques.
Another advantage is that further transaction charges can be prevented by letting the options contracts to expire. This is a direct result from the positioning of the spot price of the underlying line being between the inner strikes near the tail of the option contract.
The benefits obtained by adopting the Iron Condor strategy is that these commonly used techniques are used and taught to students in an attempt to learn day trading. As these are slight modifications of other condor techniques, The Iron Condor has many more advantages if adopted by a more advanced day trader with its many options available.
About the Author:
TheScienceOfTrading.com provides 90 free minutes of videos on stock option investing and provides a complete and detailed option trading course for beginners to experts.
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