The Iron Condor

Our Opening Iron Condor Trade

Every month, we submit an order to sell an Iron Condor trade to open a position.  We are in a position of power from the beginning of each trade as WE decide when to close it down to lock in profits or to limit losses.

Our orders are simple and straight-forward.  Below is just a sample of a typical Iron Condor order sent to all subscribers and autotrading brokers simultaneously via e-mail to open our monthly positions.

Sample Opening Iron Condor Trade Alert

We will be submitting the following opening day order(s):
The following is an Iron Condor for the RUT.

1)  Buy RUT Dec 11 810 Call
2)  Sell RUT Dec 11 800 Call
3)  Sell RUT Dec 11 650 Put
4)  Buy RUT Dec 11 640 Put
5)  Sell/Credit Limit of $3.75
6)  Expires on Dec 16, 2011


Opening Iron Condor Trade Breakdown

Let's take the Iron Condor sample above and break it into sections that may be easier to comprehend.

1)  Buy RUT Dec 11 810 Call - This Strike is worth less than its corresponding CALL Strike
2)  Sell RUT Dec 11 800 Call - This Strike is worth more than its corresponding CALL Strike
  • The two Strikes above are executed for the CALL side of our Iron Condor.  Executing a trade to sell the strike closest to the-money for more than what is spent to buy the strike furthest away from the-money nets a Credit for the seller, creating the Vertical Credit Spread we need to open up this position.

    • 3)  Sell RUT Dec 11 650 Put - This Strike is worth more than its corresponding PUT Strike
    4)  Buy RUT Dec 11 640 Put - This Strike is worth less than its corresponding PUT Strike
    • The two Strikes above form the Vertical Credit Spread for the Iron Condor on the PUT side in the same manner as seen for the Vertical Credit Spread created for the CALL side of this opening order.

      • 5)  Sell/Credit Limit of $3.75
      • This is the credit received upon opening the position.
        • 6)  Expires on Dec 16, 2011
        • This is the expiration cycle for this monthly position.