Wednesday, March 12, 2008

How You Can Benefit From Trading Options With Iron Condors

Using Iron Condors, an investor can generate a solid monthly income and can achieve 10% returns every month, consistently. If you re tired of whipsaws and drawdowns in your trading account, learn more about iron condor options strategies. The unique and powerful ability of iron condors is that they enable you to make money no matter which way the market goes.
Description of an Iron Condor An iron condor is a type of options spread trade that involves simultaneously buying and selling multiple contracts in order to capture a particular segment of future market movement.
The iron condor is a neutral strategy that is a combination of a two different options strategies: a bull put spread and bear call spread. A bull put spread strategy is when an investor sells a higher striking option and buys a lower striking option on the same stock with the same expiration date. A bear call spread strategy is when the investor buys call options of a certain strike price and sells the same number of call options of lower strike price on the same stock expiring within the same month. There should always be an even number of options traded, in multiples of four, so that the trade is always weighted equally with no downside or upside bias. This strategy is non-directional because it works independently of market movement, meaning it does not matter whether the market goes up or down.
Benefits of Iron Condors The great thing about the iron condor trading strategy is that it is a neutral strategy, which gives you the upper hand. Trading options with iron condors can be a risky and costly trade, but there are several advantages that you will find with no other method.
As mentioned, this is a neutral strategy allowing an investor to make a profit within a large region by balancing both kinds of spreads. One of the biggest advantages to this volatility trading is the limitation of losses you will face. Losses are limited if the stock goes against you in one way or another.
Trading Iron condors can be fairly easy and fast using the Condor Options strategy. An investor can make money with as little as ten minutes per week. In addition, each investor can choose how they handle the risk and volatility. A conservative investor can sell fewer options and invest the returns in a high yield bond. An aggressive investor can sell up to 10 iron condors a week and reinvest the returns with expert advice.
There are many different strategies and investments to choose from within the stock market. Trading options with iron condors has several advantages that can potentially give an investor the upper hand in the stock market and manage the inherent volatility to their maximum benefit.
The description of an iron condor is simple, it is a way an investor can generate a solid monthly income and achieve 10% returns every month, consistently. Trading options with iron condors has several advantages that can potentially give you the upper hand in the stock market.



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