My FAVORITE Options Strategy - The Iron Condor
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- Опубліковано 22 сер 2024
- Learn how to trade iron condor - my favorite options strategy for profit
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Today I am going to teach you how to make money using my favorite option trading strategy - the iron condor.
Woo this one is going to be an exciting one because in this video I get to show you how I make consistent passive income by setting up iron condors
Now when trading options, you make trades based off of what you think will happen with the stock. You buy calls if you think the stock will go up, you buy puts if you think the stock will go down. When you sell calls for the most part you are hoping the stock doesn’t reach your strike price by the expiration date, and same thing when you sell a put, you are hoping that the stock does not go down below your strike price. Now sometimes its much easier to say - well I don’t know if its going to go up or down but I think the stock will trade between this price and this price. This is where the iron condor comes in. With an Iron Condor your goal is for the stock to trade in-between 2 points. So you pick a strike price higher than the stock price, and you pick another strike price that is lower than the stock price. Now if that stock trades in between these two strike prices, and by expiration finishes between these two strike price then you make profit. It’s as easy as that. So lets say Company X is now trading at $50 per share - and you as a savvy option trader say - hmm, I think Company X will stay in between $55 on the high end and $45 on the low end by next month so I’m going to put on an Iron Condor to make this trade. Now if Company X indeed stays between $45 and $55 then you will win this trade and make profit. (Watch Video for example)
So what makes up an iron condor? Well as an option trader you know that we can either buy a call, sell a call, buy a put and sell a put. These are the only 4 trades that we can make in options. Everything else, including the iron condor will be a combination of the individual trades we already know. So if you know how to buy calls and puts, and if you know how to sell calls and puts, you already know how to trade an iron condor. The iron condor is made up of 4 different trades put together. First we are going to pick the strike prices that we believe the stock will trade in-between and sell those options. So let’s go with our previous example and say we think company X will stay in-between $45 and $55. We are going to sell a call with a strike price of $55 and sell a put with a strike price of $45. Because we sold a call at $55 we are saying we don’t want to stock price to reach $55 - just like if you were to sell a call by itself. On the put side, by selling a put a $45 we are saying that we don’t want the stock to drop below $45. When combining these two trades we are combining the two things that we want to happen into one idea - which is wanting the stock to trade below $55 and above $45 or in other words, between these 2 points. We are going to now buy a call and buy a put on either end of this trade for protection. We are going to buy a call ABOVE the call we sold, and we are going to buy a put BELOW the put we sold. These 4 option trades together make up the iron condor. You are selling a call, and selling a put. You are then buying a call higher, and buying a put lower for protection on your trade. (Watch video for full breakdown)
I am not a financial advisor - none of the above video is meant to be taken as investment advice. I am just showcasing MY own strategy and my investments should not be tried and duplicated based solely off the information in this video for risk of losing money.
![АЛАУДИНОВ у Скабеевой: эти их ВСУ нас НЕ ДОГОНЯТ 😁 [Пародия]](http://i.ytimg.com/vi/an0anqU4WGQ/mqdefault.jpg)
Many have been asking since the inception of this channel to make a Patreon, so I finally did. I will invest the money from Patreon back into building Pandrea Finance and grow our community. Thank you all for the support! Check it out here: www.patreon.com/pandreafinance
Thanks for doing that. Im a beginner and look forward to learning from you.
i'm slightly confused because I don't know how to sell a call with the shares i control with my call that i bought
i though leaps were your favourite options strategy?
Hi Alex , thank you for launching patreon . Am just a newbie in the world of options and stock trading and don’t have a large account to start with . Do you think it will still be helpful for a newbie like me to join the 10$/month ?
is this your discord?
You should mention that a trader should get out of the trade and take profit at a certain point before expiration. The math works out in the long run to take 30-50% of max profit and close the trade.
Yup you're absolutely right! Almost never a reason to hold a short option position all the way to expiration!
Hé actually mentioned that many times in other videos.
It's a real shame that you no longer produce content because it's excellent. I learned so much from your videos almost a year ago and your videos are evergreen.
Why is he not producing videos anymore?
@@soonlee2022 That's a great question.
I think he had a set number he wanted to make video wise, now it's free $$ from the constant views.
Are you still trading? Please, pandrea left us in the dust ? 😅
Agree, he has a gift for teaching, best I’ve found, even vs paid for lessons
I think that was the best explanation of this strategy I've seen. Thank you.
Hi You can write me on telegram@pandreafinance
I agree with you 100 percent
Crystal clear explanation. Nothing is more helpful than this video. PERIOD.
Thank you for keeping it simple, funny, and easy to learn. I am sure you are helping many understand this complex topic.
I will forever be indebted to you 😇 I was able to build a big
income stream during the covid-19 pandemic investing with Mrs.
edwina nora. You’ve changed my whole life, Thanks so much
I'm surprised you know her. I've been making a lot of profits
investing with her for a few months now.
@@charleschristopher3095 Wow, amazing to see others who trade with Mrs.
edwina i'm currently on my 5th trade with her and my portfolio has grown
@@sessenturner8341 You invest with Mrs edwina too? Wow that woman has been a blessing to me and my family.
@@harrypower2504 I'm new at this, please how can I reach her?
@@natashaturner3898 I was skeptical at first till I decided to try. Its huge
returns is awesome. I can't say much.
One of the best teachers on UA-cam when it comes to options 👍
Hello what's the best way to get started with trade cos I've been making my personal research for a while now
Wow that's awesome because I Started with $5,000 at the same time. Now at 52,000$.
Doge?
same! I started with 6k and now 39k...happy I started with Sonia
started my investment with her with a sum of 750$ now I'm at 4200$
Bitcoin to the Moon 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🌝🌝🌝🌝 Kuma Inu and Hina Inu are hidden 💎💎💎💎💎
My brain kinda locks up a bit but if I keep watching I will eventually get it plus you seem honest 🙏😀🐈
Successful people don't become that way overnight. What most people see at a glance wealth, a great career, purpose is the result of hard work and hustle over time. I pray that anyone who reads this will be Successful in life.
You're right. Been thinking of going into gold and crypto trading
Trading the forex and crypto market is way better than any online investment 💯
I totally agree with you it has been an eye-opening experience for a lot of people.
Investment is the key to achieving success with the current pandemic slowing down so many businesses
Yes the economic crisis has taught people the importance of multiple streams of income unfortunately having a job doesn't mean security
I get my news from comedians, and I get my finance information from magicians. I truly love the World we are building collectively. Appreciate you 🙏❤🙏
łnvestment Helpline⬆️⬆️📩⤴️⤴️.
Waiting for this for a long time. Smashed the like button even before watching g the video. Thank you!
Thank you, Pandrea, for this straightforward and easy to follow webinar on IRON CONDORS.
Nice video!! Very engaging from the beginning to the End., I'm new to crypto trade and I have been making huge losses but recently i see a lot of people earning from it. Can someone please tell me what I'm doing wrong
That is true, you need an expert broker and account manager to make good profit from Bitcoin trade.
As a beginner who don't understand how Bitcoin trade really works and you really want to make profit from it. I will advise you to first start working with a professional
How can someone know a professional acount manager that is trustworthy when legit once are hard to find this days.
Have a target profile on Bitcoin
Keep investing Keep holding 90% of millionaires right now are investors in the crypto market
Mrs Hannah is legit and her method works like magic I keep earning every single week with her new strategy
You made this really easy to understand for someone whos just starting out...great video!
Still watching in April 2024. Thank you! You are the best teacher!
Come on why are there bots advertising for some bitcoin trader?
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆
First timer to this channel - excellent method in explaining Iron Condor
I realized that the secret to making a million is making better investment.
What I think you need is a Financial Adviser, who can help you get in and out of any investment at any time and you'd sure be in Profit
*TERESA JENSEN WHITE,* That's whom i work with
No she's not!... UA-cam is a public place; i can't drop her information here but You can just put her name on google and you will be directed to her website and drop her your message.
Thank 6OU for the video. Yours has been the clearest explanation 8 have watched on the Iron Condor system. Since I just subscribed, I am looking forward to your other videos.
Best explanation ever.keep doing videos like that
Your videos are some 🔥. Ive been trying to learn these since like 2020 but the way you teach it is like gold. I fw it😎. Keep up the good work brody
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆
Thanks You can write me on telegram @ pandreafinance
At around the 5 min mark I knew this was the video I really needed
I LIKE THE WHEEL,I AM GOING TO STUDY FOR A MONTH.. THEN POST MY FIRST TRADE. ❤ GLAD I SEEN YOU ON ANDRE ‘S CHANNEL, LOVE THE WAY YOU ALL EXPLAIN 🎉🎉🎉
Is the iron condor really your favorite strategy? how do you use moving averages and rsi to hedge against risk?
Finally a good explanation of this strategy....every other video was just confusing and long winded.
Hi, I'm new here but you made this so simple to understand. I subscribed. I appreciate it. Keep up the great work.
Thanks for this video. It's very clear. Hope there is a part 2 explaining exit plan
So it looks like you risk just losing the cost of the contracts themselves? Let's say I setup an Iron Condor between 46/45 and 50/51. What happens if the price hits $50.17? I now have to put up 100 shares of $50.17 right? Like what if the price spikes to $50.17 then back down to $48 before and/or after closing? What happens if the price hits $50.17 at close then the next day hits $52 (past my bought call), will that still save me?
U keep it very simple and understandable. Thanks so much at first I was intimidated but u have helped me
Subscribed because of the bit about not being subscribed. Hilarious and subtle way to get subscribers!
Thanks~~~~~
Well done.
Who else loves my dudes Channel? 💯
……👆👆…….
For more information and investment /trading guidance.. Send a direct message✅⬆️
This dude can teachhhhhhh!!!! Great trabajo ! Subscribed!
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆
OMG I learned so much in this video. Your illustrations are amazing!
Thank you for making this concept so easy to understand!!
I'm dumbfounded that you only have 45k subs. You're show is awesome!
Legit love this channel. I see why Robinhood is cracking down on who can do what. They are telling me to do a interview to upgrade to level 3 😢
Ok I have a question. 🙋♂️ now do you ride the condor to the expiration date letting it close on its own or do you close early like with individual options ?
Close early
In my opinion, you should always close the entire position before expiration. I typically have a 50% profit target on option selling strategies. So if I were to sell an iron condor for $300 in credit, I would close the trade once the value of the position fell to $150.
Hi Alex, I've eaten up both of your iron condor videos, so thank you for that! I do have one question though. I know that the loss is capped if the stock price either goes above the call that we bought or below the put that we bought, but what is the stock price expires in between either the strike prices for our puts or the strike prices for our calls? What happens in that situation?
I've got a video that explains this situation exactly :)
ua-cam.com/video/BfJ476APKjA/v-deo.html
Nothing they just expire and you keep the premium
@@chewymoney8153 Not true. You’ll get assigned on either the short call or put while the long option expires worthless. You’ll therefore have to carry a long or short stock position overnight or over the weekend.
@@scottreesetradinginvesting7936 can you clarify that?
But what happens if the share price goes above the sold call or below the sold put but NOT above or below the bought call/put? (this is the question i asked, and it sounds like this is the answer to it, but i want to make sure)
@@MilqueMoney Watch my video that I linked to above, and it should answer your question.
That was very clearly explained. A year ago, that would've sounded like complete gibberish to me.
this is the kind of guy that would stop to help you with car problems
Literally the best options channel out there
Thanks
YO I THOUGHT YOU WERE A MAGICIAN
Aren't you the magic guy? I learned passes from your videos! Now options strategies? I wonder how many cross interest fans like that you have.
Options are magic
But what happens if the share price goes above the sold call or below the sold put but NOT above or below the bought call/put?
Yeah I am curious about that too. Will it get exercised by buyers and we are forced to buy their shares for example in selling Put?
I'm new to this and tried to do the Iron Condor today on Robinhood, but it was asking to do each position separately. Did I do something wrong?
Need to have level 3 options on robinhood to do this
So this is best for stocks that trade sideways ?
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆
Yes
Yes, ideally for an iron condor you want the stock to trade sideways (or be range-bound). But just understand that a stock that has recently been trading sideways is not guaranteed to continue doing so.
What if the price went up to $55.5? Do we need to manually exercise the buy option? And for this case, what will be our loss ?
This is my question as well.
Did you get the answer to the question?
When do you run this strategy only in a neutral market? Or in all conditions?
Keep it coming...great information 👍
.
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆.
Amazing options video.
Thank you.
smooth easy to follow, outstanding!
Good video, Alex! Do you stick to a 30-45 day expiration date for this strategy too? Any rules of thumb for how far apart your calls and puts are (using delta or any of the greeks for example)?
I will do a video on a live trade soon with more details! I usually do a minimum of 30 days!
……👆👆…….
For more information and investment /trading guidance.. Send a direct message✅⬆️
I just learned about it and thank you for sharing, it would be really helpful if you would share a real trade example. Thanks for sharing.
Hey Alex , thanks for making an easy to understand options video ! However , do you suggest options trading for small/beginner portfolios or just focus on individual stocks to build the portfolio in the first place
You can actually get started trading options with LESS capital than you would need to trade stock. With strategies like iron condors, credit spreads, debit spreads, etc. you can take on less than $100 of risk while giving yourself a high chance of making 20% to 30% on that capital.
I don’t understand how it’s for small portfolios. What if you get assigned because one of the legs has gone ITM. Now you’re on the hook for 100 shares.
@@Hardtimes330 Watch the video or do further research, you are protected by the put and call that you buy. What you are describing is selling a naked call/put, this is an iron condor which is low risk.
Easy to go into debt with options as a beginner as well. But youtube.com/@travelingtrading4212 said the same thing. Starting to think you guys are right insured
@@Hardtimes330 You can roll the options into the next month with different strike prices. If you are able to paper trade in your account, you will see a roll option in the same area where you close positions. This must be done before monthly expiration of your current position.
Nice video Pandrea , might I ask what editor are you using for your video?
Nobody explains what happens when at Friday close the stock price is between the short and long legs on either side, , would I be obligated to sell or buy 100 shares
No because you don’t have a naked call or put. You are covered by your buy options
I have a video that explains this exact kind of situation!
ua-cam.com/video/BfJ476APKjA/v-deo.html
I feel like a Neanderthal that recently evolved into a Homosapien. You’ve shown me the light!
Woo! Next thing you know you’ll be evolving into an iron condor 🤣 …it was funny in my head
……👆👆…….
For more information and investment /trading guidance.. Send a direct message✅⬆️
this man needs to hire an editor 💀
Newbie question
I deposited $100 to my Robinhood account I did the iron Condor strategy I received a $600 premium. In order to execute the trade Robinhood used my $600 premium plus my $100 deposit to execute the trade.
After two-and-a-half weeks I decided to sell for a $30 profit profit.
(The expiration date for the contract(s) was January 2023..)
Did I do something wrong?
is this how i was supposed to execute it?
Will my collateral be released back to me?
You'll get the collateral back. Try to collect 1/3 of the width of the strikes to manage your risk at trade entry.
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆
thank you so much this really made alot of sense. fingers cross and hope you guys win.
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆
Does the brokerage company automatically close out the position if the train goes above or below your iron condor wings?
Excellent! Very new to trading options, but excellent explanation Thanks
I learned a good bit from this. Thank you
clear and simple explanation.
How far out is a good expiration for these? I’m trying to make one with a mid limit price but it doesn’t seem to be getting executed
45 days to Exp.
Hi You can write me on telegram @pandreafinance
Between 30 and 45 days from expiration is the sweet spot. Time decay begins to accelerate around that time, and you'll still be able to collect decent premium.
When the brokerage show the Max loss is it 1/2 of that amount because you can only lose on 1 side or it that part already calculated? Thanks
Hi You can write me on telegram@pandreafinance
The max loss on an iron condor is calculated as follows...
(Width Of The Wider Spread - Credit) x 100
If the widths are the same for the Call and Put sides of the iron condor, then it doesn't matter.
Great video! Question though. What happens after expiry and the stock price is now in the money for the call side? For example, the max return is 77 and the max loss is 23. Do you lose the 77 and lose an addition 23? Or is it the difference, 77-23= $54?
So is there a possibility of one of the contracts getting exercised? What would happen then if I don't have the actual collateral? Am I missing something?
if the stock does exceed or drop below the strike prices you won’t get assigned like you would just when selling options - you are protecting your position by buying the options. I will make a live trade soon, maybe for the next video.
@@PandreaMoney understood! Thanks for the reply! 😁
……👆👆…….
For more information and investment /trading guidance.. Send a direct message✅⬆️
So I have an iron condor expiring today within the strike prices. My max loss was higher then my max gain. So once these contracts are out of pending status, should I receive a credit of the max gain?
Very nice explanation, thank you very much!!!
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆
Great video very well explained thank you so much for this Inf. Very useful 👌🙌
What exactly is “passive” about trading iron condors? Is this not the textbook definition of active investing?
Hi Alex , i may be one of your most senior ( by age ) followers . I just watched my first utube video by you on Iron Condor Options . I will watch more videos and join. The video was helpful and understandable .
Thanks~~~~~
Excellent video
could you do a video on vertical spreads thanks?
Do you sell the puts and calls at the same time?
What's the song at the intro? 0:00 - 0:30
Paraphrased "When you sell a Call you are hoping that the stock doesn't reach the strike price"
How much commission and fees would you have to pay for doing 1 contract of iron condor( Approx) in SPY options?
Love your channel thank you for everything ❤️
Hello, do I need to own 100 shared of the stock I want to di Iron Condor with?
How I close an iron condor before expiration?
Would you use the Iron condor on the SPX on weekly trades?
A lot of people do this :)
can you make a video on best ways to grow small accounts (under 5k-1k$)
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆
Honestly the best way is to get a job and save as much money as you can. Even generating a 100% return on a $5k account in one year only leaves you with a $5,000 profit...before tax.
Excellent teaching my brother stay safe 👍
I love this , Thank you.
When do I receive the funds if the price stays between both strike prices?
you receive the credit immediately into your account when you open the trade. Check out my “passive income selling options” video and “how to sell covered calls” - these videos explain more in depth about receiving credit! hope that helps!
łnvestment Helpline⤴️TeXtMe DiReCtLy👆👆
Are option trading abs day trading the same thing
Not really...options trading is any kind of trading strategy (and with any time horizon in mind) that involves options. Day trading is a general form of trading where you are opening and closing positions in the same trading day...and you could be doing this with stocks, options, futures, crypto, etc.
In the sub already, learned a lot from this guy.
Very easy to understand vid for this strategy , on your IC do you look at a specific implied volatility for a week or ten day trade for this strategy , thx.
Low IV stocks are ideal for Iron Condors.
Great personability!
Is Robinhood app good for beginners?
for beginners i would say yes. it has its flaws for sure but it has the most simplistic and easy to understand/learn interface of them all if im being totally honest.
@@PandreaMoney Thank you!
łnvestment Helpline⬆️⬆️📩⤴️⤴️.
Would definitely recommend ThinkOrSwim or TastyWorks over Robinhood.
Amazing explanation
So the premium credit has to be higher than the cost call and put you buy
Ty!
Nicely done.
Iron Condor has higher risk (max loss significantly greater than max gain)than profit, AM I missing something here?
No, You can write me on telegram@pandreafinance
You are correct, but what you're missing is the probability of profit with an iron condor. These kinds of strategies have a very high chance of making money...and so the tradeoff for the high win-rate is having more risk. Markets are always very efficient...there is a pro and con to everything you do.
you said that when we sell a call we hope that we dont get exercised.
ive been only selling calls right at the money hoping that it gets exercised so i get to collect a big premium every time. i simply market buy/limit buy the shares and sell calls. Been doing it since january 2023 and lost only one small trade on it. i dont get why people keep saying that they dont want to get exercised. you get a few dollars from the appreciation and a big premium