Iron Condor Options Trading System
Your membership to Crestrade will include alerts from the Iron Condor Options Trading System:
|Iron Condor Options Trading System Specifications|
|Perfect for:||Traders seeking to profit from premium decay|
|Trading Style:||Options Trading|
|Average Hold Time:||2-6 weeks, many through expiration|
|Trade Frequency:||2-5/month, max of 4 simultaneous open positions|
|Focus List:||Index options and highly liquid, well known stock options|
|Strategy Objective:||Large range for "max profit"|
|Profit Goal*:||33% - 150% profit per trade based on amount risked (buying power used)|
|Risk Control:||Defined Risk Approach limits loss to buying power used|
|Alerts Used:||Entry and Exit Signals through a Trade Alert Email, Live Trading Room and Trade Forum (demo)|
|Delivery Method:||All can be delivered to Computer, Smart Phone and Tablet via instant messanger and emails|
* Every Trading Strategy involves risk of loss and profits are NOT guaranteed on ANY trade
What is an Iron Condor?
Iron Condor Spread Defined: Combine a Bearish Vertical Credit Spread and a Bullish Vertical Credit Spread on the same underlying security. By doing this, an investor will potentially be able to double the credit obtained over a single spread position. Since there are two spreads involved in the strategy (four options), there is an upper break even and a lower break even. A profit is made if the stock remains above the lower break even point or below the upper break even point.
What it means: When you enter an Iron Condor, you are actually entering 4 options orders at once. If the stock stays within a specific range, you profit, and if the stock moves out of the desired range, you lose.
EXAMPLE: Take a look at what the order looks like on a Iron Condor on the stock QQQ where we buy 1 call option with a strike of 43 and sell 1 call option with a strike of 42 as the "upper" Vertical Spread AND sell 1 put option with a strike of 38 and buy 1 put option with a strike of 37 as the "lower" Vertical Spread. The result is a complete trade that gives us a .55/contract ($55) CREDIT to our account (for each contract we choose to do).
The price of QQQ at the time of this trade was 40.09.
EXAMPLE: Now look at the profit and loss scenarios that could occur on the trade we entered above. You will notice that if QQQ closes ANYWHERE between 38.00 and 42.00 on expiration day, we PROFIT $55 on the trade. Above 42.55 and below 37.45 we start to lose on the trade, with a MAXIMUM loss of $45 total:
Utilize an Expert Approach to Trading
Our approach is designed to consistently profit on Iron Condors: When we look for Iron Condor trades, we are looking for trades that have an extremely high probability of profit because of their wide range of profitable trades (called the sweet spot). We look specifically for opportunities where options have higher levels of volatility priced into them than we believe will occur between now and expiration. In almost all cases, the amount risked will be equal to or lower than the maximum profit for the trade.
Our Options Strategy experts scan the market looking for the best Iron Condor trade with these three elements:
- Stock currently priced at or near max profit point -- We’re looking for a stock that we don’t think will move much until expiration, so we only enter Iron Condors where the maximum profit is achieved in the event that the stock price doesn't move at all.
- WIDE and HIGH Profit Range -- Our Iron Condor trades have a nice wide range of profit points on the stock, so that even if the stock does move in one direction or another, there is plenty of cushion before the trade turns into a loss.
- LOW max loss -- One of the best things about Iron Condors is the defined risk that is involved. We keep losses low when we are wrong.
Trade Alerts that keep you "in the know"
Whether you are just getting started or a seasoned trader, you want to know the analysis behind the trades. At Crestrade we believe strongly in the value of education and improving the trading ability of our members.
You will always know exactly where we stand on every trade, every day. We will send you real-time entry AND exit trade alerts via email and our Live Trading Room (Click here for demo) along with our online trade forum to keep you fully up to date on every position. Each alert and update comes complete with an expectations and analysis movie (view demo) that includes entry price limits, stop loss levels and profit targets to insure that you always know exactly what is going on with every open position in your account!
Trade Options on YOUR Schedule
Trade alerts and daily recaps are designed specifically so that you can place the order with your broker anytime prior to the next trading day. Each alert and update comes complete with entry price limits, stop loss levels and profit targets. You will be able to trade with confidence knowing that expert analysis and accountability is behind every position in your account.
Iron Condors are a low-risk, medium-reward strategy designed to profit from the time-decay of option premiums when a stock "sits" within a certain trading range. The Iron Condor system is a part of the Crestrade Options Trading System.