Hey it’s Sasha Evdakov founder of Rise2Learn.com and in this video want to talk to you about trading options more specifically what the heck is an Iron Condor.
You probably are wondering what it is and you might have heard it around but when you trade options there’s some spread that you can do and Iron Condor is one of them. In this video I like to explain to you exactly what an iron condor is and show you a diagram behind the simplicity behind it and furthermore how to set one up.
We’re not going to get into adjustments of the iron condor or anything like that but I just want to show you the basics and foundation behind an iron condor.
If you have large range swings and you know it'll go all the way to the left or all the way to the right you know you can have a price move then you could buy an iron condor but typically you'd want to sell an iron condor because due to your profit picture this is kind of what it would look like and that the stock doesn't have to move.
Again as far as where to put the strike prices that’s something that you know goes in detail into a little bit of another video are but this is how you set one up and you know normally I would say you can do a 50-50 spread meaning that okay half is here half is there and you’re about half here half there but stocks don’t stay still.
You will have to make some adjustments maybe take one side off then shift it over or take the other side and shift it over. You will have to manage your risk accordingly but in terms of setting one up this is how you do it and overtime this white line starts to reach the top of this red line and that's what happens with an iron condor and you can set these trades up on pretty much any stock and just let it go for even a week.
It doesn't have to go all the way to expiration even if it just goes for one or two weeks you could make three hundred dollars on two contracts if it doesn't move or even if it moves to down the 360 you're still up two hundred dollars or if it goes up to 390 you're still up to 235 dollars.
This white line is the real line of your profit and loss up but most people live in this Disney world of this red line so don't live there just understand that that's the expiration graph but you want to pay attention to this white line but you can see that it slowly starts to climb fairly quickly and you're able to reap in the benefits and the rewards by holding your position and managing your risk.
That's how an iron condor looks and that's how you set one up.
Thanks for listening to me and I hope you enjoyed this video.
Remember to go out and to do what you love, contribute to others, and most importantly live life abundantly.
Author: Sasha Evdakov
Sasha is the creator of the Tradersfly and Rise2Learn. He focuses on high-level education speaking at events, writing books, and publishing video courses on business development, internet marketing, finance, and personal growth.
I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More
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