this is literally the only reasonable explanation I could find on the entire internet for why people choose iron condors over put/call condors, thanks this helps a lot
You do but its no big deal. Why are people so uptight about assignment? Since its a spread your broker will close the position out and your call that you bought being the same number of contracts and same expiry cancels the out the other. There are extra fees with assignment so most close their positions a bit early. I like SPX personally since its all cash settled.
That's a good rule of thumb. I will trade stocks/ETFs sometimes with up to 15% spread...but I primarily stick to the most liquid. Think of it as additional commission...the wider the bid/ask, the more expensive the trade. The amount of open interest on the strikes you trade is a factor as well for the ease of getting in and out of the trade
@@andrewp.ellison17 I like to trade on strikes that have open interest in the hundreds (or better yet thousands). It's just a measure of activity...all open orders for the day on that strike. You can also look at volume which is the actual number of transactions on that strike. The more actively traded...the easier to get filled on your orders
I am confused. When you buy an iron condor option are you making money when the price falls outside of the range shown or inside of the range shown? If I am betting the price of SPY stays between 448-452 and it does over the next month or expires in that range in the next month am I making money or losing money? Is that an iron condor? Did I explain that well enough?
To clarify...we SELL an Iron Condor to open the position. We make money if price stays inside our our range within the expiration cycle...and we can close the trade for partial profit anytime leading up to expiration. We have a full step by step Iron Condor class for no cost. Here's the link - navigationtrading.com/product
this is literally the only reasonable explanation I could find on the entire internet for why people choose iron condors over put/call condors, thanks this helps a lot
Happy to help...thanks for the comments!
Wow, super clear. Thank you so much! +1 sub
thank you for the clarification
Very good, clear video.
Thanks Tim. Glad it was helpful!
What is the platform u r using in the video?
Thinkorswim...TD Ameritrade
Don’t you run the risk of getting assigned on an ITM vertical spread with the condor strategy?
Yes...unless you are trading European style options like SPX, NDX or RUT. We don't trade Condors, but this video was to clarify the difference.
You do but its no big deal. Why are people so uptight about assignment? Since its a spread your broker will close the position out and your call that you bought being the same number of contracts and same expiry cancels the out the other. There are extra fees with assignment so most close their positions a bit early. I like SPX personally since its all cash settled.
Should the bid ask spread be less than 10% of the bid ask price, whats the risk if the spread is wider than 10%?
That's a good rule of thumb. I will trade stocks/ETFs sometimes with up to 15% spread...but I primarily stick to the most liquid. Think of it as additional commission...the wider the bid/ask, the more expensive the trade. The amount of open interest on the strikes you trade is a factor as well for the ease of getting in and out of the trade
@@Navigationtrading Thank you for your reply. How do I understand the open interest on the strikes?
@@andrewp.ellison17 I like to trade on strikes that have open interest in the hundreds (or better yet thousands). It's just a measure of activity...all open orders for the day on that strike. You can also look at volume which is the actual number of transactions on that strike. The more actively traded...the easier to get filled on your orders
I am confused. When you buy an iron condor option are you making money when the price falls outside of the range shown or inside of the range shown? If I am betting the price of SPY stays between 448-452 and it does over the next month or expires in that range in the next month am I making money or losing money? Is that an iron condor? Did I explain that well enough?
To clarify...we SELL an Iron Condor to open the position. We make money if price stays inside our our range within the expiration cycle...and we can close the trade for partial profit anytime leading up to expiration. We have a full step by step Iron Condor class for no cost. Here's the link - navigationtrading.com/product
Tik tok "financier" watching: okay got it, i'll tell all my fans
Me, a CFA3 candidate: what the f*** is going on
i was tripping balls on how u got a 50 point wide spread and yet got a credit of over 1.00... then i saw the volatility.... sheesh
Lol...would LOVE to see that vol back in the market...this VIX below 14 is no fun 🙃