Correct me if I am wrong. I am thinking that the Delta 25 strangle is much wider at 45 DTE as opposed to 7 DTE. In other words the body of the condor is narrower when put on closer to expiration. A nominal move of $5 or $10 near expiration would have a much greater impact on the 7 DTE Iron Condor, then on the 45 DTE Iron Condor with 7 DTE remaining. With the 7 DTE, your short positions might be in the money, whereas your 45 DTE Iron Condor short position, with the same nominal move might still be out of the money. Yes, you had to give up something to get to this point, i.e. being in the trade for 38 days, but, you gain breathing room.
@@edmandell3064 Sometimes earlier if the market is moving too much, or later if the market moves back into the center of the range; but yeah 21DTE management in general. As long as you keep an eye on it you basically can't lose money - it's amazing.
@@edmandell3064 --- Not sure whom you are asking. I Close the Trade with about 20% of the Credit received in 2-7 days of opening the Trade. This is the scenario at least 90% of the time.
Recommendation: please don't reference deltas for ICs because, due to put skew, the widths can be dramatically different between the call and put sides, whereas for margin purposes they have to be identical widths to be recognized as an IC (at least at IBKR).
What about stocks like TSLA and NVDA where you hardly get additional premium going from 14 DTE to 45 DTE. You're now locking up capital for 3x as long for the same profit. Does the reduced risk make up for the lower profit?
If you turn the number of max loss trades into percentage of trades made your looking at 9.5% for 45 day and 9.8% for 7 day, not that big of difference. Show the numbers that equate it to a negative P/L.
Tom dropped the ball on that one. The table listed theoretical Max loss . All are 10% of the number of trades rounded down. To give Tom a break it looks the research team posted the wrong results and forgot to post the actual occurrences of Max losses rather than the theoretical Max losses.
@@matthews749 Looks like the team needs a proof checker before they go live. I'm surprised Batt didn't notice that every expiry had exactly 10% number of Max losses which would disprove the whole theory of the piece. Now I really wanna see the actual numbers!
I'd love to see more research on dollar wide ICs. Instead of making adjustments to an existing IC when the market moves against a wing, just setup another IC.
I prefer 45 DTE IC, as well. If the trade moves against me early at least I’ve sold more duration to soften the blow in the event I want to exit early or roll.
Most short-term traders don't trade iron condor, they are more likely to be directional. So would we see the same result if call spread or put spread were sold at the expected move not 30 delta?
Correct me if I am wrong. I am thinking that the Delta 25 strangle is much wider at 45 DTE as opposed to 7 DTE. In other words the body of the condor is narrower when put on closer to expiration. A nominal move of $5 or $10 near expiration would have a much greater impact on the 7 DTE Iron Condor, then on the 45 DTE Iron Condor with 7 DTE remaining. With the 7 DTE, your short positions might be in the money, whereas your 45 DTE Iron Condor short position, with the same nominal move might still be out of the money. Yes, you had to give up something to get to this point, i.e. being in the trade for 38 days, but, you gain breathing room.
That also all plays into their thesis (which is correct) that volatility/gamma risk is too high near expiration.
Yep, I have a 100% win rate with 45 DTE ICs right now, and a maybe 30% win rate with shorter ICs. Those 45-ers are just heavy, tanky, mfers!
Same here. 100% with 45 DTE. How long have you been trading 45 DTE SPX?
100% Nice. Are you closing the trade at 21 DTE?
@@edmandell3064 Sometimes earlier if the market is moving too much, or later if the market moves back into the center of the range; but yeah 21DTE management in general. As long as you keep an eye on it you basically can't lose money - it's amazing.
@@edmandell3064 --- Not sure whom you are asking. I Close the Trade with about 20% of the Credit received in 2-7 days of opening the Trade. This is the scenario at least 90% of the time.
Recommendation: please don't reference deltas for ICs because, due to put skew, the widths can be dramatically different between the call and put sides, whereas for margin purposes they have to be identical widths to be recognized as an IC (at least at IBKR).
What about stocks like TSLA and NVDA where you hardly get additional premium going from 14 DTE to 45 DTE. You're now locking up capital for 3x as long for the same profit. Does the reduced risk make up for the lower profit?
Funny enough, this video came in my thread right after another Tasty one that was also quoting Jim... Funny how recommendation algos work?
If you turn the number of max loss trades into percentage of trades made your looking at 9.5% for 45 day and 9.8% for 7 day, not that big of difference. Show the numbers that equate it to a negative P/L.
Tom dropped the ball on that one. The table listed theoretical Max loss . All are 10% of the number of trades rounded down.
To give Tom a break it looks the research team posted the wrong results and forgot to post the actual occurrences of Max losses rather than the theoretical Max losses.
That makes more sense.
@@matthews749
Looks like the team needs a proof checker before they go live.
I'm surprised Batt didn't notice that every expiry had exactly 10% number of Max losses which would disprove the whole theory of the piece.
Now I really wanna see the actual numbers!
Theta plays such an important role.
It pays to listen to people who know what they're doing.
I'd love to see more research on dollar wide ICs. Instead of making adjustments to an existing IC when the market moves against a wing, just setup another IC.
Correct me if wrong: The wide wing would make it easier to roll the losing side. A narrow wing is pretty much impossible to roll for a credit.
I prefer 45 DTE IC, as well. If the trade moves against me early at least I’ve sold more duration to soften the blow in the event I want to exit early or roll.
Most short-term traders don't trade iron condor, they are more likely to be directional. So would we see the same result if call spread or put spread were sold at the expected move not 30 delta?