Keep in mind... (just a general thought for people) ... For most people $100,000 in a single position is quite a lot. However when you're dealing with traders and investors many people have a larger account and the size is all relative to your own situation. For example when you're dealing with a 20 million-dollar account, $100,000 is not a large position on an iron condor. It's all relative to your personal situation and what people fail to realize is when they comment on this video saying that it's a lot of money, they're usually referring to their own personal situation.
Makes sense, honestly. If you can make 100k with less than 100k of total available, then the risk is probably too high and cant be used consistently as steady income
@@captaincannabis3321 They are probably talking about ETF and stock trades. Options are a little different and you can make more % profit as long as your hedge/risk management helps prevent huge losses. Options just require more study and practice than conventional buy/sell trades.
Hello. I am doing something similar to this now. I sell iron condors and try to get 1/3 of what I put up as premium. So out of 10k I get 3k premium. I pick them up about 6 weeks till expiration and close them when they have 2 weeks left. Usually I can get 1k profit from doing this. I start a new batch every week, so I am using 40k to get 1k per week without taking much risk. Only about 55k a year but it works.
That is true however this is why they created puts and you can always purchase a put on the downside if you like or the upside you can go ahead and purchase a call
Let's be honest, even if someone had 1-2 hundred K in capital would not necessarily risk a loss of 80k (downside @ low probability) for a gain of 7k. It represents a huge concentration risk of your portfolio, imposing you losing like 30-50% of your capital. I think one should bear diversification in mind, meaning capping one single exposure at max 10-15%
I fully agree. You need to spread capital. However, this is just a general video to get people thinking. Sometimes brainstorming and ideas are not necessarily always practical for application. Just like in grade school there's exercises to get better at writing letters. Even though in the real world we look at words and sentences.
The problem with spread is that you get nothing if it fails, NOTHING!!! I lost 10k doing spreads on SPY when the market crashed a few months ago and it sucked, I got nothing to show for that money. I would rather do a cashed secured put because I can at least hold the stock and hope for it to go back up and sell covered calls while I wait.
@@tradersflyofficial yes, but i was hoping it went back up but it didn’t. If I closed out of early I would’ve lost the same amount right? I guess I should’ve set up a stop loss.
If you close it out early you get to keep all the time premium. For example let's say spread is worth $3,000 but you get out of it early you might be able to get out with only a $2,000 loss for a $1,000 loss but not a full $3,000 loss because you have a ton of time premium remaining depending on when you exit
What about rolling the positions out???... The only downside I see with rolling is the capital it ties up, but other than that, it buy you plenty more time to be right... the key is to roll before it gets in the money!! :)
Yes, the answer is YES, with one condition: if you're lucky! There is still too risky to put all your 80K-ish dollar in one trade IR for 95 contracts?!
How do you lose if you sell early - when is the trade making money or losing money ? how hard is it to sell if you feel the trade will go south on you? what is that risk if it is still inside the iron condor? it seems like if it falls outside the iron condor - you are wiped out and it will take years to recovery the capital! I think you should explain this further.
i don't think you need to go this large to pull 100k per year. Sticking with lower risk weeklies, 5-6 IC contracts, collecting 10-15k of premium, aiming for a 15-20% profit will get you there.
Wklys are higher risk - have to go out farther out to keep it high prob but also hugh risk - little prem in exchange for perceived safety of short strikes not being challenged (prob of touching > prob of expiry, so they will neef to be defended). Short gamma convexity is whacko on short term wklys, so tiny move away from ATM center will have delta going against you fast to either side - better be an adjustment/morphing/rolling master.
What about trading really short iron condors like 3 days for SPY? You can get quite a wide condor and still scalp a little money each time with what seems like low risk since the time frame is so short and each day the theta decay makes the condor short up in price.
Do we exit iron condors or we let them expire to make money? Is there a difference between buyiing or selling a iron condor if se sell iron condir we make money when it goes down but remains in the range?
Keep in mind that although Iron Condors are a defined risk strategy, you are still subject to early exercise/assignment on the short sides before expiration. Although the setup of the iron condor limits the position to a max loss, you may find yourself and your margin account having to deal with the short term consequences of being assigned stock you don't want to hold (or incapable of holding without a margin call) in your portfolio. You may have to hold that position over the weekend and you never know what you are going to get on Monday in respect to market volatility. The short time you have to hold the long position can cause you to generate a profit or a loss that goes beyond the max loss in the initial setup of the strategy. The profit is not a problem but a loss could be a large problem. So be careful, even when trading condors. One final point, the risk of early assignment goes way up if you are trading an underlying that is going ex-dividend before expiration, They will take the stock away from you on the short call side for the value of the dividend. Be careful when you set up an iron condor, that the stock is not going to go ex-dividend prior to expiration. Bottom line to answer your question, you should consider exiting the position early if you are running the risk of early exercise. Many option traders will actually exit an option position once they have earned 50% or greater of the max profit potential. This avoids losing out on the trade in the last week before it expires by a sudden movement in the price in either direction.
I have around 4k that I can trade with, and so, to reduce capital requirements I tend towards iron condors. I'm not exactly sure what I'm doing wrong, but I used to have a max profit of about 120, and even with trying to widen strikes, always shooting for %50 IV rank, my max loss has stayed the same (between 300-800) however all my trades are showing max profits between 30-70. Any ideas why this is happening? Since I prefer closing at 25% profit trades like this are giving me extremely low profits, and I'm starting to increase risk by closing at %50 profit.
You are trading iron condors that have too high of a probability of success. You should be shooting for a 70%-75% probability of success and are most likely initiating a setup that is in the 80-95% probability. Unless you scale the number of contracts up, which you do not have the portfolio value to do. you will be assuming too much risk for too little profit. $30 profit on a $300 max loss setup means you would be earning 10% profit over the course of the 30 DTE. Not good. Watch your delta's of the options you are selling (the short side of the setup) You should be selecting a strike that has a 70% probability of being OTM at expiration. In other words tighten your strike prices so they are not so wide. As a rule of thumb, I am looking for a setup where I can earn at least a .30-.50 (30%-50%) return on my risk investment. So if I have a $400 max loss, I must have a max profit of at least $120 (30% of $400) before I put the trade on. It is not worth your time and trouble otherwise. Given the small amount of equity you have to trade with, 1 trade per month at a $120 max profit will generate $1,440 per year in profits, which is a good return for your portfolio. that of course assumes you let the condors run to expiration before you close them out and you have 100% success rate. Neither of those assumptions are very likely to happen, since increased volatility will always be present to potentially cause you to lose money. That is the reason why many option traders will close out a position once it hits the 50% or greater profit potential. That would means you will need to double the number of trades you are making or trading 2 contracts instead of one on each position.
You don't hold all the way to expiration and you would split things up across multiple durations and multiple strikes. This is just a concept and a talking point. However you would want to create risk arrays and spread your risk across multiple condors so this way you don't have any single concentration of risk at any single point
Yeah I'm thinking this guy doesn't trade 95 contracts a pop like he is showing. Hell he is barely 30 years old and he has 1 million to trade? I'm thinking he is making money off of YOU to buy his books which is just regurgitated info that has been written about for 25 years. They only thing new is Think Or Swim. That didn't exist nor did weekly option expirations 25 years ago. Either way, don't do it!!!!
Of course not. It is a stated in the video that you should diversify your risk with options such as on the Vega. So instead the smarter approach would be to trade 20 to 30 contracts iron condors and then 20 to 30 contracts of calendar spreads and maybe another 20 to 30 contracts on double diagonals or verticals or something different. It's silly to put everything into one investment.
Absolutely! But the point is to show the example if it's possible and what it would take. However to structure a portfolio around it is a whole different story.
@@tradersflyofficial It can be done successfully, but not for everyone plus you need to be able to weather the accompanying stress. You can recover from any spread going south; it takes good strike and body width, to begin with, then a management strategy.🙂
@@ShihabPersonalFinance don't trade high volatility stocks, maybe try doing spy condors...whe average movement on the SPY is +/- 1% a day... that means you should position the iron condor 6-7 points away from the strike price. You can also do it three times a week, so let's say you put a collateral of 1,800 to make 400$ of premium. If you do that 3 times a week it's a solid 1,200 a week
I have been trying different accounts (Ally, Robinhood, TastyTrade, and ThinkorSwim). ThinkorSwim is definitely my favorite but I had your impression at first. I spent a weekend just watching videos and experimenting in the mode that allows you to use play money. Once you get it down, it's amazing and much more powerful. I'm moving all my money there and moving my wife's account to TastyWorks.
IC is none directional (also you can be directional with skewed IC), BF is directional ( you have a sweet spot you targeted when you started the trade, that spot is where you hinge your two spreads), BBF is more risky than BF but usually you can and should do it for a credit so one of the directional risk is removed
There is not a guarantee play, if we are having a bad day emotionally we could blow everything in one bad trade. The advantage with the iron is the max risk but even so, sometimes (if not paying attention or closing on time) you get assigned and it has happened to the best of us. Being that said I still LOVE trading. Great info Sasha!
Thanks for the info. Could you explain some advanced spreads. I would like to know how to widen the butterfly wings by combining different strategies. I hope you do this. I know you like lottos, but I have seen how some pros widen the wings and whatever move the stock makes, the option is still profitable. I know each bundle can have 4 legs, but if we combine several bundles, they can widen each other's wings.
Keeping this simple with Iron Condors, you have 2 things; one is the strike width and other is body width. So, yes, you can do both based on your preferences. For example with underlying that are very volatile and price moves of 20-30-50 points a day, you better believe you need to adjust your wings, right? I just got through with BYND in Iron Condors for about a month and it was essential that the width of the body and strikes were positioned perfectly to winning the trade. Good luck 😏
you really don't need much more complicated spreads, some advanced spreads are actually simpler than IC's such as a "Christmas Tree" spread a "Turkey" spread, a " stupid" spread, a "Jade lizard", a "Big lizard" they are used in different situations but as far as sophistication, you really don't want to go beyond 6 legs and usually 6 legs is just a combination of a two leg and a four leg
So great how much $ would you lose? If and will market go crazy you could easily lose 100% of the money you entered option with. Win 12 in a row and lose 1 done. Back to investing.
I use this and other Strategies and I have to manage it very closely, I never EVER let it expire and I usually close it after a day max two because you are right, one bad move and your max loss enters
@@gwentchamp8720 You actually have the same risk with a credit spread. With an iron condor you can only lose if the stock goes far in 1 direction. So if it goes really high, you lose on the call spread but win on the put spread.
Hi, I have been watching your videos lately and it seems the numbers seems a bit off on option prices, though the concept remains the same but the actual price, spread and profit are way off from the current market situation. You might wan to redo them so that they reflect perfectly with current situation. I do spread on TSLA and I realized that the spread points on POTM is far different from what it is two years ago and basing income calculation or making decision on those will probably not accurate. I enjoy all the videos it solidify the strategy I am using now. Thanks.
I appreciate the insight. However the volatility, market conditions, prices for the stocks, and your days to expiration might be different. The goal is to understand the concepts from the videos. You'll never match up the prices in the market conditions though since the market is dynamic and constantly moving.
What do you smoke!? This is such a misleading video! According your own numbers you mention here, just 1 or 2 losses in 2 out of 12 months would wipe out several months worth of "$7,000 per month" profits that you claim would be made! Great way to lose a $100,000 investment, forget making it!
Yes if you let it go to your full expiration part you're ranges you can lose the full investment, but that would be the case in any iron condor. The point is to not let it go past the range and expire. Instead take profits or contracts off. Or but additional protection with larger sizes
@@tradersflyofficial How do you account for price jumps -- either up or down -- and the market never settling in between the 2 short strikes in the short iron condor before expiration? In that scenario, you don't even have a chance to take profits, or cut losses, or take contracts off? If you therefore suggest a wider gap between the 2 short strikes to survive that scenario, then the premium obtained on those 2 short strikes would be minimal, and would hurt the income from the strategy!
Why not use cheaper stocks that people can afford? Example Coke, Intel, Cisco, ect and do these same methods. Also, why not show this with shorter expirations
@@ShihabPersonalFinance I never saw her records so I am guessing here, because 5 delta the premium is so low she must have piled up on them and it blew up probably couple times in a row, that's one way you can loss millions, what can you do? easy answer - trade small
@@ShihabPersonalFinance can you give me some details so I will help you analyze, it help everyone to avoid such a mistake in the future when did you put on the trade, which spreads ( price, date ) you chose, did you manage your trade and when did you close?
As much as I would love this to be true, this simply doesn't work. Doing 10 delta iron condors means you will win 9 out of 10 trades but it also means you will lose 1. The 1 you will lose will most likely undo all the previous gains from the winners. People have learned this the hard way.
Yes if you fall asleep at the wheel and let it go to full max loss then yes. If you however manage the position, then you can work the trade and reduce your losses on the bad trade or even be close to breaking even on the nasty moves.
Are you crazy? seriously, are you completely insane? This is NO WAY to trade your money. unless that 96,000+ dollars represents 1-5% of your account, DO NOT TRADE LIKE THIS. If you want to make 8-10,000 per month, then make 2-3 trades per week (MAX) to take Premiums of 1% growth on your account (2-3000 dollars). Keep your strike price far away from the trading range (
So basically you have to very good to win most of your trades, you have to have warren buffett capital and your good. Someone with this type of capital is likely not trading iron condors. I don't know about this guy.
Yep, I trade with about 450k and its is so easy to earn money with iron condors, I use to just trade stock and I the long run went into negative, with credit condors and my adjusting strategy I am successful on about 80% of all my trades
This comment section is hilarious, so some of you is planning to make 100k/ year out of thin air? The video is lieterally about making money with Iron Condors (low risk low reward strategy)
I disagree with that strategy because the broker sells your information to the institutions and the institutions will go against your trade. That strategy is just gambling. It doesn't make you money in the long term.
Im starting to.realize that, 90% of making 50$ plus 10% chance of losing 450$, thats breaking even in the long term, to succeed, you need to make adjustments to reduce max loss
If you blindly trade iron condors it probably is tougher to make a profit, if you take into account liquidity, IV, IV Rank, Probability, days to expiration, risk/reward ratio, Kelly ratio... then manage your winners, you will start making money trading them and wonder why you didn't start sooner. Note: I love the think or swim platform, but the commissions will kill you. IB is a ton cheaper!
@@rousepoker great info, i havent been managing my winners, I do take iv rank into consideration, what about expiration? I do 30.days, should i do 45 days like tastybtrade suggests? I also do 5 delta on each side
@@ShihabPersonalFinance I manage winners because I have found that a lot of times your winning trade can become a loosing trade. If you come up with a set % that you want to make off each trade, then when it hits that you can just close out of the trade make that % and free up your account for another trade. (Note I came up with my % from backtesting) If you graph the time decay of an option I'm sure it would be around the 45 days when time increases the rate of decay. Me personally, I like more time even if the time decay isn't quite as much. I'm usually alway > 45 days to expiration. Also note that you usually always make more from selling a call spread than a put spread. Sometimes personally I don't feel it is worth selling the put spread and only take the call spread side, or I'll take and sell the call spread and then also sell a naked put. I only trade option on liquid indexes and etfs. I'm also a firm believer in the Kelly Ratio, managing Risk and backtesting my strategies. I backtest everything back to 2006 because that is how far back I can get option pricing.
@@rousepoker I make a killing of Vertical Put Spreads and Iron Condors. I don't care to be in the market any more than 1 week. Theta, vega, the greeks don't really play as important in my shorting strategies, but what is key is your strike prices, the width of your strikes, and your body width. Even you would agree that being a 2-4 standard deviation from the stock price (mean) has great probability odds of expiring OTM. Good luck.😆
OMG $85k on one trade...no thanks. I like to sleep at night.
I Trade this type of trades and even much higher and sleep like a baby!
Keep in mind... (just a general thought for people) ... For most people $100,000 in a single position is quite a lot. However when you're dealing with traders and investors many people have a larger account and the size is all relative to your own situation.
For example when you're dealing with a 20 million-dollar account, $100,000 is not a large position on an iron condor. It's all relative to your personal situation and what people fail to realize is when they comment on this video saying that it's a lot of money, they're usually referring to their own personal situation.
Sum up: to make 100k you need to have min 100k and another 100k for protection.
Makes sense, honestly. If you can make 100k with less than 100k of total available, then the risk is probably too high and cant be used consistently as steady income
Thats honestly a fantastic ROI considering most would say you need at least $1 million to make $100k.
@@captaincannabis3321 They are probably talking about ETF and stock trades. Options are a little different and you can make more % profit as long as your hedge/risk management helps prevent huge losses. Options just require more study and practice than conventional buy/sell trades.
still 50% roi. You can start with as low as 5k. Pay in an additional 400-500/ month and you‘ll have your 100k in less than 5 years.
20-25% ROI might be a more reasonable number.
He answered the question i don't know why he has so many dislikes.. Some people think it's easy to make 100k in year through options safely...
Hello. I am doing something similar to this now. I sell iron condors and try to get 1/3 of what I put up as premium. So out of 10k I get 3k premium. I pick them up about 6 weeks till expiration and close them when they have 2 weeks left. Usually I can get 1k profit from doing this. I start a new batch every week, so I am using 40k to get 1k per week without taking much risk. Only about 55k a year but it works.
Sounds great!
I've thought about doing this myself. Are you still doing this strat, how's it worked out for you, what underlying(s)? Thx
What delta are you trading?
At a 10 to 1 ratio all is takes is one time to be wrong and your whole account is gone
That is true however this is why they created puts and you can always purchase a put on the downside if you like or the upside you can go ahead and purchase a call
Let's be honest, even if someone had 1-2 hundred K in capital would not necessarily risk a loss of 80k (downside @ low probability) for a gain of 7k. It represents a huge concentration risk of your portfolio, imposing you losing like 30-50% of your capital. I think one should bear diversification in mind, meaning capping one single exposure at max 10-15%
I fully agree. You need to spread capital. However, this is just a general video to get people thinking. Sometimes brainstorming and ideas are not necessarily always practical for application. Just like in grade school there's exercises to get better at writing letters. Even though in the real world we look at words and sentences.
Any vids on swing trading iron condor on a wide spread with QQQ or SPY? Higher cost, decent premium
How about ODTE SPX, sell at the money buy the wings just 50 points out? Max profit around 460, max loss around 40$?
The problem with spread is that you get nothing if it fails, NOTHING!!! I lost 10k doing spreads on SPY when the market crashed a few months ago and it sucked, I got nothing to show for that money. I would rather do a cashed secured put because I can at least hold the stock and hope for it to go back up and sell covered calls while I wait.
Right. That's why you typically should not hold spreads until expiration especially if you're in the losing side
@@tradersflyofficial yes, but i was hoping it went back up but it didn’t. If I closed out of early I would’ve lost the same amount right? I guess I should’ve set up a stop loss.
If you close it out early you get to keep all the time premium. For example let's say spread is worth $3,000 but you get out of it early you might be able to get out with only a $2,000 loss for a $1,000 loss but not a full $3,000 loss because you have a ton of time premium remaining depending on when you exit
What about rolling the positions out???... The only downside I see with rolling is the capital it ties up, but other than that, it buy you plenty more time to be right... the key is to roll before it gets in the money!! :)
How far out did you get for expiration?
Yes, the answer is YES, with one condition: if you're lucky! There is still too risky to put all your 80K-ish dollar in one trade IR for 95 contracts?!
I never said put all your money into the trade I wants. However the video shows the concept of ramping your account up once you have a large account
How do you lose if you sell early - when is the trade making money or losing money ? how hard is it to sell if you feel the trade will go south on you? what is that risk if it is still inside the iron condor? it seems like if it falls outside the iron condor - you are wiped out and it will take years to recovery the capital! I think you should explain this further.
did you use this strategy in late feb, early march? hehehe
Yes, no issues. Just buy a few extra puts.
@@tradersflyofficial 26 april is the day world change?jjjj
i don't think you need to go this large to pull 100k per year. Sticking with lower risk weeklies, 5-6 IC contracts, collecting 10-15k of premium, aiming for a 15-20% profit will get you there.
Yes you can do it with weeklies. But increases price risk
Wklys are higher risk - have to go out farther out to keep it high prob but also hugh risk - little prem in exchange for perceived safety of short strikes not being challenged (prob of touching > prob of expiry, so they will neef to be defended). Short gamma convexity is whacko on short term wklys, so tiny move away from ATM center will have delta going against you fast to either side - better be an adjustment/morphing/rolling master.
What about trading really short iron condors like 3 days for SPY? You can get quite a wide condor and still scalp a little money each time with what seems like low risk since the time frame is so short and each day the theta decay makes the condor short up in price.
I do 1 DTE Spy Iron Condors. Delta around 10-15. I feel that it is safer & faster returns.
Do we exit iron condors or we let them expire to make money? Is there a difference between buyiing or selling a iron condor if se sell iron condir we make money when it goes down but remains in the range?
Keep in mind that although Iron Condors are a defined risk strategy, you are still subject to early exercise/assignment on the short sides before expiration. Although the setup of the iron condor limits the position to a max loss, you may find yourself and your margin account having to deal with the short term consequences of being assigned stock you don't want to hold (or incapable of holding without a margin call) in your portfolio. You may have to hold that position over the weekend and you never know what you are going to get on Monday in respect to market volatility. The short time you have to hold the long position can cause you to generate a profit or a loss that goes beyond the max loss in the initial setup of the strategy. The profit is not a problem but a loss could be a large problem. So be careful, even when trading condors.
One final point, the risk of early assignment goes way up if you are trading an underlying that is going ex-dividend before expiration, They will take the stock away from you on the short call side for the value of the dividend. Be careful when you set up an iron condor, that the stock is not going to go ex-dividend prior to expiration.
Bottom line to answer your question, you should consider exiting the position early if you are running the risk of early exercise. Many option traders will actually exit an option position once they have earned 50% or greater of the max profit potential. This avoids losing out on the trade in the last week before it expires by a sudden movement in the price in either direction.
I have around 4k that I can trade with, and so, to reduce capital requirements I tend towards iron condors. I'm not exactly sure what I'm doing wrong, but I used to have a max profit of about 120, and even with trying to widen strikes, always shooting for %50 IV rank, my max loss has stayed the same (between 300-800) however all my trades are showing max profits between 30-70. Any ideas why this is happening? Since I prefer closing at 25% profit trades like this are giving me extremely low profits, and I'm starting to increase risk by closing at %50 profit.
Noah Colome how wide are the strikes that your selling? The bigger the gap between the options you’re selling, the less the max profit
You are trading iron condors that have too high of a probability of success. You should be shooting for a 70%-75% probability of success and are most likely initiating a setup that is in the 80-95% probability. Unless you scale the number of contracts up, which you do not have the portfolio value to do. you will be assuming too much risk for too little profit. $30 profit on a $300 max loss setup means you would be earning 10% profit over the course of the 30 DTE. Not good.
Watch your delta's of the options you are selling (the short side of the setup) You should be selecting a strike that has a 70% probability of being OTM at expiration. In other words tighten your strike prices so they are not so wide. As a rule of thumb, I am looking for a setup where I can earn at least a .30-.50 (30%-50%) return on my risk investment. So if I have a $400 max loss, I must have a max profit of at least $120 (30% of $400) before I put the trade on. It is not worth your time and trouble otherwise.
Given the small amount of equity you have to trade with, 1 trade per month at a $120 max profit will generate $1,440 per year in profits, which is a good return for your portfolio. that of course assumes you let the condors run to expiration before you close them out and you have 100% success rate. Neither of those assumptions are very likely to happen, since increased volatility will always be present to potentially cause you to lose money. That is the reason why many option traders will close out a position once it hits the 50% or greater profit potential. That would means you will need to double the number of trades you are making or trading 2 contracts instead of one on each position.
@@j.s.9981 what a great reply.. thanks
Iron condor has 70% probability of success so don't fear.. and exit one day before expiration or at 70-80% profit...
If you put 80,000$+ to make 7,000 a month. What are the risk of losing?
You don't hold all the way to expiration and you would split things up across multiple durations and multiple strikes. This is just a concept and a talking point. However you would want to create risk arrays and spread your risk across multiple condors so this way you don't have any single concentration of risk at any single point
Yeah I'm thinking this guy doesn't trade 95 contracts a pop like he is showing. Hell he is barely 30 years old and he has 1 million to trade? I'm thinking he is making money off of YOU to buy his books which is just regurgitated info that has been written about for 25 years. They only thing new is Think Or Swim. That didn't exist nor did weekly option expirations 25 years ago. Either way, don't do it!!!!
Of course not. It is a stated in the video that you should diversify your risk with options such as on the Vega. So instead the smarter approach would be to trade 20 to 30 contracts iron condors and then 20 to 30 contracts of calendar spreads and maybe another 20 to 30 contracts on double diagonals or verticals or something different. It's silly to put everything into one investment.
Thanks for the video. I learned a lot.
You're welcome! Glad to hear that!
Isnt it dangerous to put it all in one stock, you can get wiped out, even with adjustments,
Absolutely! But the point is to show the example if it's possible and what it would take. However to structure a portfolio around it is a whole different story.
@@tradersflyofficial i dont know ive been doing pretty bad with iron condors, even with 5 deltas, find myself always adjusting
you can't go safer than iron condors.... without that much risk tolerance you shouldn't be trading, buy bonds or something
@@tradersflyofficial It can be done successfully, but not for everyone plus you need to be able to weather the accompanying stress. You can recover from any spread going south; it takes good strike and body width, to begin with, then a management strategy.🙂
@@ShihabPersonalFinance don't trade high volatility stocks, maybe try doing spy condors...whe average movement on the SPY is +/- 1% a day... that means you should position the iron condor 6-7 points away from the strike price. You can also do it three times a week, so let's say you put a collateral of 1,800 to make 400$ of premium. If you do that 3 times a week it's a solid 1,200 a week
You're explain well.
Thank you very much and thanks for watching.
Other than swan events, does 10% put the trade at 16 -16 delta on the selling leg? Thanks
I don't understand your full question. Can you repeat your question more specifically or in more detail
I was asking if you check the delta on the options sold for low risk16 (delta=16% probability to be itm). Thanks
What do you think of the Iron Condors three times a week with the SPY ????
You can but the shorter the duration the more price risk you have. It's fine as long as you mix up your durations
looks complicated.. navigating on Ameritrade
I have been trying different accounts (Ally, Robinhood, TastyTrade, and ThinkorSwim). ThinkorSwim is definitely my favorite but I had your impression at first. I spent a weekend just watching videos and experimenting in the mode that allows you to use play money. Once you get it down, it's amazing and much more powerful. I'm moving all my money there and moving my wife's account to TastyWorks.
Hey Sasha- thank you brother for all your info. You make it very understandable and you're very concise. Keep it up
Hi, Sasha, can you make video for The pros and cons of Iron Condor and Butterfly & unbalanced Butterfly?
IC is none directional (also you can be directional with skewed IC), BF is directional ( you have a sweet spot you targeted when you started the trade, that spot is where you hinge your two spreads), BBF is more risky than BF but usually you can and should do it for a credit so one of the directional risk is removed
There is not a guarantee play, if we are having a bad day emotionally we could blow everything in one bad trade. The advantage with the iron is the max risk but even so, sometimes (if not paying attention or closing on time) you get assigned and it has happened to the best of us. Being that said I still LOVE trading. Great info Sasha!
Thanks for the info. Could you explain some advanced spreads. I would like to know how to widen the butterfly wings by combining different strategies. I hope you do this. I know you like lottos, but I have seen how some pros widen the wings and whatever move the stock makes, the option is still profitable. I know each bundle can have 4 legs, but if we combine several bundles, they can widen each other's wings.
Keeping this simple with Iron Condors, you have 2 things; one is the strike width and other is body width. So, yes, you can do both based on your preferences. For example with underlying that are very volatile and price moves of 20-30-50 points a day, you better believe you need to adjust your wings, right? I just got through with BYND in Iron Condors for about a month and it was essential that the width of the body and strikes were positioned perfectly to winning the trade. Good luck 😏
you really don't need much more complicated spreads, some advanced spreads are actually simpler than IC's such as a "Christmas Tree" spread a "Turkey" spread, a " stupid" spread, a "Jade lizard", a "Big lizard" they are used in different situations but as far as sophistication, you really don't want to go beyond 6 legs
and usually 6 legs is just a combination of a two leg and a four leg
So great how much $ would you lose? If and will market go crazy you could easily lose 100% of the money you entered option with. Win 12 in a row and lose 1 done. Back to investing.
I use this and other Strategies and I have to manage it very closely, I never EVER let it expire and I usually close it after a day max two because you are right, one bad move and your max loss enters
I almost entered a short iron condor on AMD today. I've never done an iron condor in my life !!
OMG, I'm scared.
NEVER EVER play iron condors with real money until you fully master it on paper money, unless you want to give all your money to the market , have fun
@@JULiANS_LUCID For now, I'm sticking with credit and debit spreads. I get into enough trouble with those, lol
@@gwentchamp8720 You actually have the same risk with a credit spread. With an iron condor you can only lose if the stock goes far in 1 direction. So if it goes really high, you lose on the call spread but win on the put spread.
@@rogerward801 I've actually traded about 8 iron condors so far. All of them have made money. Not all have made 100% but no losses yet 😯
Please do not try this now people!
What platform is being used in this video?/
Think or swim （part of TD Ameritrade）
Hi, I have been watching your videos lately and it seems the numbers seems a bit off on option prices, though the concept remains the same but the actual price, spread and profit are way off from the current market situation. You might wan to redo them so that they reflect perfectly with current situation. I do spread on TSLA and I realized that the spread points on POTM is far different from what it is two years ago and basing income calculation or making decision on those will probably not accurate. I enjoy all the videos it solidify the strategy I am using now. Thanks.
I appreciate the insight. However the volatility, market conditions, prices for the stocks, and your days to expiration might be different. The goal is to understand the concepts from the videos. You'll never match up the prices in the market conditions though since the market is dynamic and constantly moving.
What do you smoke!? This is such a misleading video! According your own numbers you mention here, just 1 or 2 losses in 2 out of 12 months would wipe out several months worth of "$7,000 per month" profits that you claim would be made! Great way to lose a $100,000 investment, forget making it!
Yes if you let it go to your full expiration part you're ranges you can lose the full investment, but that would be the case in any iron condor. The point is to not let it go past the range and expire. Instead take profits or contracts off. Or but additional protection with larger sizes
@@tradersflyofficial How do you account for price jumps -- either up or down -- and the market never settling in between the 2 short strikes in the short iron condor before expiration? In that scenario, you don't even have a chance to take profits, or cut losses, or take contracts off? If you therefore suggest a wider gap between the 2 short strikes to survive that scenario, then the premium obtained on those 2 short strikes would be minimal, and would hurt the income from the strategy!
One market correction, you are screwed!
Grab a few puts
@@tradersflyofficial thanks.
Dumb. Backrest this exact trade and watch what happens over the past 12mo.
Just buy a few extra puts to slow down your delta.
Why not use cheaper stocks that people can afford? Example Coke, Intel, Cisco, ect and do these same methods. Also, why not show this with shorter expirations
Cheaper stocks don't have a lot of premium with options. Sure we can show worth shorter expiration I'm another video
@@tradersflyofficial I am on TD Ameritrade now and an Iron Condor for INTC could yield $1000 a week per position
@@sashaevdakov1436 thanks
Dobri den sacha good video thank you
Thank you! I'm glad you found the video enjoyable
Probably not. Sounds like picking pennies in front of a steamroller
Can always overlay with a gamma iron condor or buy protection on the back-end (put-side)
Can you explain where did karen the supertrader go wrong? How did she lose millions?
she sold strangle not IC with no downside protection
@@ethanluo7355 ya but she was very conservstive, legging in and using a 5 delta, and managing at 30 delta, if she lost mollions, what will i do
@@ShihabPersonalFinance I never saw her records so I am guessing here, because 5 delta the premium is so low she must have piled up on them and it blew up probably couple times in a row, that's one way you can loss millions, what can you do? easy answer - trade small
@@ethanluo7355 i just lost 1k on netflix with 2 contracts
@@ShihabPersonalFinance can you give me some details so I will help you analyze, it help everyone to avoid such a mistake in the future
when did you put on the trade, which spreads ( price, date ) you chose, did you manage your trade and when did you close?
Genius
Thank you so much for watching.
dude its 47& tax on day traders lol. youll need to gross 200k trading.
Review the 1256 tax rule on indexes. I would recommend a better tax accountant.
brb home equity loan margin deeeeeeeeeep
As much as I would love this to be true, this simply doesn't work. Doing 10 delta iron condors means you will win 9 out of 10 trades but it also means you will lose 1. The 1 you will lose will most likely undo all the previous gains from the winners. People have learned this the hard way.
Yes if you fall asleep at the wheel and let it go to full max loss then yes. If you however manage the position, then you can work the trade and reduce your losses on the bad trade or even be close to breaking even on the nasty moves.
thanks for all you are doing professor
So much risk
Yes but a lot less than buying the stock itself. Risk is all relative to account size and what you are comfortable with.
I like a lot of your videos but this is so unrealistic and a good way to go broke
Thanks Mr T.
Are you crazy? seriously, are you completely insane? This is NO WAY to trade your money. unless that 96,000+ dollars represents 1-5% of your account, DO NOT TRADE LIKE THIS. If you want to make 8-10,000 per month, then make 2-3 trades per week (MAX) to take Premiums of 1% growth on your account (2-3000 dollars). Keep your strike price far away from the trading range (
So basically you have to very good to win most of your trades, you have to have warren buffett capital and your good. Someone with this type of capital is likely not trading iron condors. I don't know about this guy.
Yep, I trade with about 450k and its is so easy to earn money with iron condors, I use to just trade stock and I the long run went into negative, with credit condors and my adjusting strategy I am successful on about 80% of all my trades
This comment section is hilarious, so some of you is planning to make 100k/ year out of thin air? The video is lieterally about making money with Iron Condors (low risk low reward strategy)
I disagree with that strategy because the broker sells your information to the institutions and the institutions will go against your trade. That strategy is just gambling. It doesn't make you money in the long term.
Im starting to.realize that, 90% of making 50$ plus 10% chance of losing 450$, thats breaking even in the long term, to succeed, you need to make adjustments to reduce max loss
If you blindly trade iron condors it probably is tougher to make a profit, if you take into account liquidity, IV, IV Rank, Probability, days to expiration, risk/reward ratio, Kelly ratio... then manage your winners, you will start making money trading them and wonder why you didn't start sooner. Note: I love the think or swim platform, but the commissions will kill you. IB is a ton cheaper!
@@rousepoker great info, i havent been managing my winners, I do take iv rank into consideration, what about expiration? I do 30.days, should i do 45 days like tastybtrade suggests? I also do 5 delta on each side
@@ShihabPersonalFinance I manage winners because I have found that a lot of times your winning trade can become a loosing trade. If you come up with a set % that you want to make off each trade, then when it hits that you can just close out of the trade make that % and free up your account for another trade. (Note I came up with my % from backtesting) If you graph the time decay of an option I'm sure it would be around the 45 days when time increases the rate of decay. Me personally, I like more time even if the time decay isn't quite as much. I'm usually alway > 45 days to expiration. Also note that you usually always make more from selling a call spread than a put spread. Sometimes personally I don't feel it is worth selling the put spread and only take the call spread side, or I'll take and sell the call spread and then also sell a naked put. I only trade option on liquid indexes and etfs. I'm also a firm believer in the Kelly Ratio, managing Risk and backtesting my strategies. I backtest everything back to 2006 because that is how far back I can get option pricing.
@@rousepoker I make a killing of Vertical Put Spreads and Iron Condors. I don't care to be in the market any more than 1 week. Theta, vega, the greeks don't really play as important in my shorting strategies, but what is key is your strike prices, the width of your strikes, and your body width. Even you would agree that being a 2-4 standard deviation from the stock price (mean) has great probability odds of expiring OTM. Good luck.😆
This can’t be a real video
Sure is...