Use The Iron Condor Spread and Profit From Todayas Stock Market
Looking to achieve financial freedom in the wake of tough economic times? Hereas one of the best option trading tips that, with careful handling of your personal expenses, can put your money back to work for you: The Iron Condor Spread. It may take time and patience, but the rewards are often worth it.
When it comes to successful online option trading, The Iron Condor Spread is a bit more advanced than other option trading systems, but results in higher profits and a lower potential loss. The Iron Condor Spread is made up of both bear-call and bull-put options, spread out on the same underlying security. Built off of the Condor Spread, the Iron Condor Spread results in a net credit by doubling the credit of a single spread position.
How does this option trading tip make you profit? The system uses two spreads, which generates two different break-even points: the upper break-even and the lower break-even. Anytime a stock remains below the upper break even point or higher then the lower break-even, you will profit.
Before embarking on this option trading tip, make sure you have plenty of available cash in your account before you start. Many online option trading brokers will not let you enter this kind of spread without the proper funds needed to fulfill the margin requirements.
What benefits does using an Iron Condor Spread provide? 1) The utilization of an uncovered position by not having to purchase or hold any stock. 2) This tip generates a complete neutral strategy. 3) Due to call and put options potential returns are increased. 4) Double credit provides lowered potential risk as well as controlled risk
The Iron Condor Spread should be used when the price of the underlying asset is expected to change very little throughout the life of the options. Maximum profit is achieved at expiration when the underlying asset equals the middle strike. Furthermore, the customization range that this option trading system allows is admirable. Hereas the profit calculation:
Maximum Profit = Net Credit Profit % = (Credit gained from short legs/greatest difference in strike) x 100 Max Loss = Greatest difference in the consecutive strike a" net credit . When using this formula the maximum profit is limited to the net gained credit. The maximum loss is limited to the level of the maximum calculated loss
Remember, the benefits of the Iron Condor Spread can be plentiful but be forewarned: gaining profits from the Iron Condor takes a lot of time and monitoring, and necessitates the proper analysis for entry. Furthermore, remember that high trading levels are required. Traders with lower trading levels cannot execute the Iron Condor Spread strategy.
When it comes to successful online option trading, The Iron Condor Spread is a bit more advanced than other option trading systems, but results in higher profits and a lower potential loss. The Iron Condor Spread is made up of both bear-call and bull-put options, spread out on the same underlying security. Built off of the Condor Spread, the Iron Condor Spread results in a net credit by doubling the credit of a single spread position.
How does this option trading tip make you profit? The system uses two spreads, which generates two different break-even points: the upper break-even and the lower break-even. Anytime a stock remains below the upper break even point or higher then the lower break-even, you will profit.
Before embarking on this option trading tip, make sure you have plenty of available cash in your account before you start. Many online option trading brokers will not let you enter this kind of spread without the proper funds needed to fulfill the margin requirements.
What benefits does using an Iron Condor Spread provide? 1) The utilization of an uncovered position by not having to purchase or hold any stock. 2) This tip generates a complete neutral strategy. 3) Due to call and put options potential returns are increased. 4) Double credit provides lowered potential risk as well as controlled risk
The Iron Condor Spread should be used when the price of the underlying asset is expected to change very little throughout the life of the options. Maximum profit is achieved at expiration when the underlying asset equals the middle strike. Furthermore, the customization range that this option trading system allows is admirable. Hereas the profit calculation:
Maximum Profit = Net Credit Profit % = (Credit gained from short legs/greatest difference in strike) x 100 Max Loss = Greatest difference in the consecutive strike a" net credit . When using this formula the maximum profit is limited to the net gained credit. The maximum loss is limited to the level of the maximum calculated loss
Remember, the benefits of the Iron Condor Spread can be plentiful but be forewarned: gaining profits from the Iron Condor takes a lot of time and monitoring, and necessitates the proper analysis for entry. Furthermore, remember that high trading levels are required. Traders with lower trading levels cannot execute the Iron Condor Spread strategy.
About the Author:
TheScienceOfTrading.com provides 90 free minutes of videos on option trading systems and provides a complete and detailed learning to day trade for beginners to experts.
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