Tag Archives: option trading

The Iron Condors – Starting These Beasts For Steady Returns

The iron condor strategy is one of the most popular option strategies available to traders. Unfortunately, it is also possibly the most dangerous.

See here’s the deal: when a new fresh faced option trader first hears of this trading strategy – he or she becomes so enamored with it that they just can’t seem to help but jump right into trading them – risking way too much money – and without much thought of what they are going to do if the trade starts to go wrong.

And it seems that a good percentage of them – if not most of them – promptly wind up getting their groins kicked in, their heads ripped off, their eyes poked out, and getting hurt really, really bad.

Now stop – wait – hold on just a second.

Before you start to get the wrong impression, please, let me clarify something here.

I LOVE iron condors.

I think the iron condor really IS a great trade.

And those claims and stories of ten percent monthly gains and ninety percent probabilities? They are absolutely true.

The big problem is that there is some very important information being left out of those iron condor claims and stories. Information that I’m sure would keep a lot of rookie option traders – who frankly just don’t know any better – from blindly making that ‘over-confident’ leap into the iron condor abyss.

See, while it may be true that the iron condor and credit spread strategies can kick off yields of over ten percent monthly and that they favor the trader by offering high probabilities of winning (in some instances as high as 80 and 90 percent) – what isn’t being talked about is the risk to reward ratio of these trades – which can be as high as 10 to 1.

10 to 1! That means that in order to try and make just one dollar, you need to be willing to risk ten. Or, put another way – in order to make 100 dollars, you need to risk 1,000 dollars. Or – risk $10,000.00 to hopefully make just $1,000.00!

And as my dear old mammy used to say: ‘that smells a lot like an awful bad egg’. Which in fact it is. That risk to reward ratio is nothing but a low down, no good, smelly rotten deal!

Even with the ten percent monthly returns and the high probabilities – all that needs to happen is for a problem month to come along (and it WILL, believe me) – and the next thing you know you’ll be staring at a gigantic loss and a zero balance account!


There is still hope…

Like I said before, I LOVE the iron condor trade.

Over the last ten years it’s been extremely profitable for me.

So apparently, even with that atrocious risk to reward quandary, there must be a method to generate consistent income with this trade.

And there is.

It all revolves around how you go about handling the trade.

As long as you learn the correct way to initially place these trades, then combine that with a super simple management technique and a few easy adjustment tricks – this risk to reward issue can be completely eliminated and no longer presents a problem.

Once you possess the correct iron condor knowledge and know how – and understand how to apply a couple super easy to implement adjustment tricks – you’ll know exactly how to exterminate any problematic market threat that comes your way, allowing you to experience the iron condor trading strategy for all that it’s ‘actually’ cracked up to be.

Teddy Baby is an option selling fanatic – markedly zealous about trading the option butterfly spread. Visit iron condors Website to find out more about his Undemanding Paint By The Numbers Plan for trading the weeklys for consistent profits.

The Secrets to Locking In Profits for Option Traders

Today, I had an interesting conversation with an option trader who is still searching for the magic formula to making consistent returns with option trading. He said many things which were so familiar to me.

The thing in particular that really stood out to me was when he alleged “Non-directional option investing doesn’t mean we will produce a return on investment in every direction. It really means that we produce a return if the asset doesn’t move in any direction. Another way to look at it, it’s really a directional strategy, sideways.” This is very true, and most schools say that it’s easy to manufacture returns with options simply because we can produce money for every direction the market goes. This is true in some points of view and false in others.

Those investing with Condors understand what I am saying, especially if you are investing in the Iron Condors which most programs and written materials preach. If you are investing with this option strategy during 2008 and 2009, you most likely aren’t doing much good. The reason for this is that the Iron Condor is just as directional as other option positions only that its direction is called “Sideways.” For most traders, it’s just as difficult to forecast a neutral move as it is to predict an upward move or downward one.

I have had many calls over the years from people losing huge chunks of their accounts trading credit spreads and condors. They all say the same thing… “I was doing great for several months, and then all the sudden I lost nearly my whole account in one day.” I have heard this story over and over again.

This is the reason why I don’t push the popular Iron Condors, Bear Calls or Bull Puts. If you are a couple days from expiration, and the RUT is really near the sold strike, then at that moment you are in a very risky position. I’ll remind you that this is the same risky method that many other investors are using to manage this option spread. Shortly all of your friends will be hearing the same story, but you won’t be sharing this news with your wife! You smile at the moment, but you won’t be if it happens to your trading portfolio. Another sad thing about this investing style is that the fear level is so astronomical that it really hurts your personal life. It makes it tough to sleep or even just relax each day.

Anyway, to deal with this problem San Jose Options Mentoring has redesigned Iron Condors and Credit Spreads. We have a different technique which gives the underlying much more wiggle room, lowering our stress level and keeping us out of dangerous situations. Remember, the less you have to adjust your condor, the better off you will be in most cases.

Besides teaching a safer way to trade Condors, we’ve also developed techniques to lock-in our profits on them. Most option traders exit their trades when they make a profit, but we can lock-in our profits and stay in the trade.

There’s yet another technique we’ve developed that I’d like to mention before we go. Every trader has some trades that don’t work out right? Well we obviously do too, but in our case, we usually end up with a Bonus Trade which gives us a chance to make back our loss with very little or no risk at all. It’s these little details to trading that make all the difference at the end of the year.

So there you have it! Whether it’s a winning trade or a loser, we have really developed some nice trading tactics that can improve your personal trading immensely.

Ready to lock in those profits? Better your Option Trading Skills today by visiting San Jose Options Mentoring online at www.sjoptions.com. Visit today and get a Free Video on Option Greeks, a $200 value absolutely free!

Policy Meeting Guidelines of BoE And BoC

Macro facts outside of Australia right away arrived in a negative way (to the next time period now) since employment personal details demonstrated a to the month (-15,400 work opportunities manufactured) plus an increase in the national joblessness speed (expanding to 5.2 percent). This unique is a follower of the more reduced Gross domestic product introduced yesterday and this also will be bringing about specialist quotes that many of us will see some other monthly interest rate reductions with the RBA at one point this season. For some of the most part, these particular amount prospects lack a clear judgement and also local macro info are going to take on a larger a better standard of benefits on the moving months.

Much more right away, still, current market focus will now move about on the future financial seminars on the BoE, ECB and the Traditional bank associated with Canada. Analysts are not wanting a change in rates of interest through the of the key loan providers nevertheless the protection plan phrases produced in the future will give you forex traders a number of advice with message for today’s sessions. With addition to this amazing, most remain attentive for the unique statements in A holiday in greece, from the Privately owned Sector Contribution (Pounds per square inch) final target time upcoming shut down and even bondholders would have until 20: GMT to verify their very own assistance in today’s bailout plan. Presently, typically the EUR/USD will be forex trading moderately greater from 1.3130/1.3160 while the USD/JPY could be remaining protected with 81.05/81.40.

Also overnight, all of the Preserve Financial institution of recent Zealand (RBNZ), presented it is monetary policy conference, providing interest rates unchanged in 2.5%. This particular had been usually expected by simply money markets possibly at typically the proceeding protection plan getting together with from the principal commercial bank Governor (Bollard), opinions in accordance with the newest Zealand Dollar were indicated, stating that the elevated currency ranges will be since a damaging pounds with export businesses and will also supply limits on GDP improvement through out this current year. Foreign language in this type shows that it really is less likely we will have an increase in costs through the approaching three months and therefore the NZD is usually overvalued at present levels.

Value guarantee currency markets have witnessed a sluggish drift bigger, recovering some of the losses observed before through the working week. This unique is occurring besides the unfavorable macro statistics using Australia and The japanese through Asiatische practice session, therefore it continues to be obvious in which forex traders are usually concentrated on the actual Eurozone more than anything else and because the The greek language PSI deadline day ways, this will likely will still be the case for the rest of today’s market action.

The actual USD/CAD is advancing lower after the big move issued in the fourteen days because price levels now make trades comfortably directly below equality and have absolutely harmed aid in 0.9955. This amazing region used to be considered as level of resistance switched support plus the 38.2% retracement of the most current move. All of the crack right now targets the actual 0.99 place, which is the following principal Fibonacci retracement however all of us anticipate price ranges for being was comprised of here and would look to get into new long job opportunities in this area.

Typically the Nikkei 225 will be captured from a longer term symmetrical triangle, by way of costs approaching counteraction with the downtrend range. Major challenge here arrives at the confluence for traditional and then Fibonacci degrees at 10160 and costs seem to be less likely to determine some slack for the benefit because of the loss of push found in typically the MACD indication. Market situations ideal in this article, because disadvantage danger significantly is more compelling than advantages likely.

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The Credit Spread Option Trading Method – The Groundwork of Ongoing Option Earnings

The Weekly Options credit spread is one of the more popular strategies among option traders. Along with being one of the easier option trading strategies to understand, another reason newer option traders in particular gravitate to this strategy is that it can require very little time to manage it while it is on. Another way to put it, is that credit spread sellers don’t need to be glued to their computer screens all day watching every tick of the market in order to generate consistent income with this trade.

The credit spread trade is a basic building block of many if not most other more complex option trading strategies such as the iron condor spread, the butterfly, and the double diagonal trade. For example, the butterfly is created using one credit spread and one debit spread, while the iron condor is made up from two credit spreads, one on either side of where the underlying is currently trading at.

Traders like to sell these vertical spreads because when invested correctly the trades have a good probability of success and can allow the investor to still profit and ‘win’ without having to be exactly right with priced direction and movement. When sold correctly, credit spreads can bring the trader a good monthly return while the individual actually placing the trade could be incorrect with their belief and ‘prediction’ of where the stock market would be heading next.

To demonstrate let’s invent a trade where the option trader feels as if the stock being traded is about to tank. Because he believes that this specific stock will not advance any higher from it’s current position a bear call vertical spread is sold, bringing in a nice credit.

The only way this spread trade can lose money is if the stock winds up doing 1 out of 4 possible scenarios – giving our trader a three out of four likelihood of winning. If the stock moves down as our trader predicts he wins. If the stock stays stagnant and goes nowhere, he wins. In fact, even if the stock moves against our trader and heads upward he wins just so long as the underlying doesn’t move so far as to breach the spread sold. The only our trader loses is if the underlying moves far enough upwards passing the option strike price that was sold – which if it does, our trader could still salvage the position through appropriate management and adjustment methods – adding up to yet another reason why option sellers love this strategy so much which is also called the Iron Condor .

To be taught these ‘tricks’ to trading the credit spread, iron condor, vertical spread and the weekly options , head over to this Iron Condor site and observe my free video. It will teach an extremely minimal system for acceptably placing, managing, and ADJUSTING these types of trades.

The Best Way To Deal Options Binaires

The operation of trading with options binaires is one that loads of folks are not familiar with. However, the use of options binaires is something which can be very advantageous if you realize the best way to go about utilizing it nicely. As an economic tool, options happen to be a great strategy for making certain that you add your finances in a vehicle that’s protected and which may result in major returns in the future. In case you are trying to find a way to deal in options, the one thing you might need to do is to employ an agent to achieve it for you.

There are numerous factors why it’s safer to commerce options binaires by application of such an agent or broker, and amongst these is the fact that they are significantly better located to make the right determination for you. Of course, if you are searching for an effective way to find out more about options, you can try and discover firms that enable you to take part in such business as a person. Nonetheless, if you are in such a situation where you have to generate some money out of options however don’t have the experience needed to achieve this, it might seem sensible to depend on the experience of an agent instead of gambling with your dollars alone.

While you’re searching for such an agent, there are several points that you could examine in an effort to prevent any problems. For instance, you have to be sure that the agent involved has expertise trading options. To this end, you would be better placed by utilizing a broker who has been dealing specifically with options binaires instead of an individual who deals with a multitude of trading tools. This offers you a greater probability of achievement because of the expertise.

The reason for it is that a person who has focused on options would’ve better ideas on how to go about making these kinds of deals. By being mainly focused on options, you could be confident that they will have the ability to make the best choices and that you will have the ability to make much more cash from them. Besides that, such agents may also be in a much better position to drastically lessen the risk of you not making any cash from the deals, because they realize specifically when to exit the transaction. Consequently through ensuring that you are working with a person who has committed to options binaires, you increase your chances of an excellent result and lower your threat.

At the end of the day, the concept of options binaires is one that has taken the financial world by storm due to the fact that it has a lot of potential to bring in significant income. If you are looking to get in on some of this action, all you need to do is consider the points above when looking for an agent. This way, you can’t go wrong with the type of trader you end up selecting.