Ep 192: What Profit Potential Can You Expect Trading Iron Condors?

July 12th, 2018

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Today we're going to take a look at what profit potential you can expect from trading iron condors.

We will cover three main points:

  1. Why is it important to know your profit potential
  2. what determines your profit potential when trading iron condors
  3. How to increase your profit potential with iron condors

We are focusing on iron condors because we have the "Options Mastery Iron Condors" Course set to release July 16th.

Click here to learn more about the iron condor course.

Why is it important to know your potential?

I want to share with you a little story: Back when we lived in Florida, I used to take my bike and ride it down to the beach whenever I wanted to take a break from work. I would go ahead and park my bike somewhere, lock it up and go for a run.

Initially, I would run for a short distance and then I'd come back. Soon I realized that I enjoyed the running process, listening to the waves going on the beach, and all that. It was a get away from my routine.

Slowly over time, I continued stretching my distance, I would go a little further every day, and then I would come back to take my bike and ride it back to my house.

I kept stretching my potential and continued pushing my comfort level and ability to go a little further each time.

I knew that if I went to the other end of the beach, I could pick up some water there, but initially, that was still very far for me. I knew my potential, and what I was capable of, I knew how long it would take me to get there, so I could decide if it was worth it to go for that run, or if I should just go a little further than usual and continue pushing my boundaries a little bit at a time.

This is what you're doing when you're trading iron condors. You're slowly looking at what is it that you can do with iron condors? How far can you get with them? And then you can decide if it is worth it for you even to trade iron condors, or if you want to invest your time and energy in learning to trade them?

Maybe after knowing your iron condor profit potential, you decide that you want to put your money into passive dividend stocks, or trade other types of vehicles, and that's perfectly okay.

What determines your profit potential when trading iron condors?

Back when I used to take my runs at the beach in Florida, there were a handful of factors that determined my running potential each day: Time, energy and weather conditions.

  • Time: The time I had available before the sunset, or before they closed the beach at 10 o'clock. So looking at the time I had available each day, I had to make sure I started early enough to be able to do the entire run.
  • Energy: Another factor that determined my running potential was how much energy I had that particular day. Now, energy increases over time based on how much experience you have.

The energy I had the first day of running was not the same energy I had the 100th day of running. As you stretch your lungs and your muscles get used to running, your ability to run longer distances increases. So If you run consistently every week over an extended period, then you could go ahead and run further, because you would have that experience which translates into energy.

  • Weather conditions: If the weather was terrible by being too windy or rainy, it was much more challenging to run.

All these things determined my running potential and how far I could get with my run in any particular day.

How to increase your profit potential with iron condors

The same concept applies when it comes to iron condors. The factors that determine your profit potential when trading iron condors are Trade time, experience, capital and market conditions.

There are a few things you can do to increase your profit potential with iron condors:

  • Increase your trade time: If you setup longer trades, you can make more money, however, by doing this you will also increase your risk potential.
  • Choose the right market conditions: You could decide to trade iron condors when there are favorable market conditions, for example, when the VIX is higher. With a higher VIX, you can make more money on your trades because you're able to sell more premium at a higher price. However, market conditions change all the time, and you can't control them.
  • Invest more capital: Another thing you could do to increase your profit potential is invest more capital. Unfortunately, capital is not something that you can easily control either. When you're first starting out, you're probably going to start with a small capital, if you do things right, your capital will grow slowly over time, but most people can't just increase their capital at their will.
  • Build your experience: Experience is the most important thing when it comes to increasing your profit potential, and it's also the thing you have the most control over.

The best way to build your experience is by continually putting on trades and continue practicing as much as you can, but also through courses, books, coaching sessions and other educational material.

These tools can help you accelerate your learning process significantly. As you become more experience, you'll learn what to do when things start going against you, how to save your positions, how to take off a position, how to hedge, etc.

I teach you all those things, and more in my new Iron Condor course -> Click here to learn more about it <-

Those are the main things you can do to increase your profit potential when trading iron condors.

It's kind of like when I used to go running on the beach, if I wanted to increase my running time for that day, I would bring a water bottle with me, to refresh myself and rehydrate when I got tired. This was an extra factor that allowed me to run a little bit further than I usually would. And that's But what you need to do when trading iron condors.

Typically, if you do things the right way, a return of 5% to 7% is possible when it comes to your profit potential with iron condors.

Could you get into the 20% or 30% return? Yes, you can. But to increase your profitability to these levels, you need to have as many extra factors in your favor as you possibly can, whether it's the time frame of your trades, your capital, the market conditions, and most importantly, your experience.

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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