The title is a bit misleading. As described this trade doesn't work on just any slow day. It works on a slow day that happens to fall on the option expiration day. If this were 2 or 3 days away from the option expiration the trade wouldn't net the full profit or run the risk of a losing trade since the stock can move more than expected in a few days. In any case it's a good educational video on how an Iron Condor works.
Video and explanation is very good but I would request that you extend this another 5 min and go through the risks of the trade. The $9600 came with some big risks.
For me to be able to do this wouldnt i have to own 10,000 shares of tesla? Help me understand because this sounds like selling naked calls to collect a premium. or would i need a different kind of account to borrow the shares? (i use tdameritrade)
You're writing 2 sets of spreads and you have limited/predefined risk, so as long as you have enough to cover the max loss then they're considered cash secured. You don't need 10k shares. For instance if you write/sell a $125 call and buy a $130 call for the same date then the max loss you could take is $5 per share, since even if the stock goes to $150 and you lose $25 per share on the $125 calls, you are able to buy shares with the $130 calls and gain $20 per share on the $130 calls leaving you with a max of $5 loss. ($130 - $125) So as long as you had $500 of collateral per spread they would be cash secured/covered. This strategy is done writing both a call credit spread above the current price and a put credit spread below the current price simultaneously. And the max loss is actually less than that because of the premium you get from writing the options.
Advancers minus Decliners and the VIX would be good to look at. You'd want to see Advancers and Decliners roughly equal, and a low VIX reading implying low volatility.
I think for me, the most relevant bit was right at the end: "Typically just before holidays". Of course, making one trade every 1.5 months is not ideal, but it's a strategy worth looking into and adding to a toolkit. Should always backtest.
@@vincentnnyc The mistakes were utterly trivial. Money required $40,400 vs $40,600, closing price 123.01 vs 123.18, etc. Didn't detract from the value of the video at all.
SMB Options Workshop: bit.ly/3ZNK4Ee
Amazing video, these trades are like black magic.
Learning the mechanics of placing a trade is only half of it. Being able to read the charts is another challenge to overcome.
The title is a bit misleading. As described this trade doesn't work on just any slow day. It works on a slow day that happens to fall on the option expiration day. If this were 2 or 3 days away from the option expiration the trade wouldn't net the full profit or run the risk of a losing trade since the stock can move more than expected in a few days. In any case it's a good educational video on how an Iron Condor works.
That was really cool how the iron condor flew onto the screen.
Video and explanation is very good but I would request that you extend this another 5 min and go through the risks of the trade. The $9600 came with some big risks.
What would be the maximum loss if the stock did move 10 points for example?
For me to be able to do this wouldnt i have to own 10,000 shares of tesla? Help me understand because this sounds like selling naked calls to collect a premium. or would i need a different kind of account to borrow the shares? (i use tdameritrade)
You're writing 2 sets of spreads and you have limited/predefined risk, so as long as you have enough to cover the max loss then they're considered cash secured. You don't need 10k shares. For instance if you write/sell a $125 call and buy a $130 call for the same date then the max loss you could take is $5 per share, since even if the stock goes to $150 and you lose $25 per share on the $125 calls, you are able to buy shares with the $130 calls and gain $20 per share on the $130 calls leaving you with a max of $5 loss. ($130 - $125) So as long as you had $500 of collateral per spread they would be cash secured/covered. This strategy is done writing both a call credit spread above the current price and a put credit spread below the current price simultaneously. And the max loss is actually less than that because of the premium you get from writing the options.
Correct Seth quite days are like coin flips! Very frustrating this video was great!
😀👍
It's a quiet day until a stock moves or until after the market closes. JMHO. Great video and appreciate all the good content.
I don't like 0dte because of how quickly price can move in the last hour (which I've colloquially heard called "power hour" or "sour hour")
Hello, what tools can we use to determine if it's gonna be a slow day? Can I just compare volume like for the first 15 minutes or something?
Advancers minus Decliners and the VIX would be good to look at. You'd want to see Advancers and Decliners roughly equal, and a low VIX reading implying low volatility.
I think for me, the most relevant bit was right at the end: "Typically just before holidays". Of course, making one trade every 1.5 months is not ideal, but it's a strategy worth looking into and adding to a toolkit. Should always backtest.
It is so risky and the potential profit to loss is 1:5. Nuh I will pass
You risk 40,000 for 10,000?
To be sure you can get royally screwed if you get it wrong, but that's still 25% return in literally one day.
There are so many mistakes in this video that I'd be shocked if anyone can learn from it. The graphics don't match Seth's words at least three times.
Please elaborate…point to the 3 mistakes in the video by timestamp. Why do you think it is a mistake?
@@vincentnnyc The mistakes were utterly trivial. Money required $40,400 vs $40,600, closing price 123.01 vs 123.18, etc. Didn't detract from the value of the video at all.