![]() ![]() A good idea is to eliminate stocks with depressed price movement, or in Squeeze, because IV will expand soon after.By choosing Market Cap ($B) larger than 10 billion, we avoid choosing stocks that can get manipulated and explode like AMC.We can filter IV Perc >67% to find opportunities that have a high chance of contracting IV and vega in our favour.We want to choose opportunities with greater than 30 DTE to get the safest theta decay and less gamma.Use Options Scanner to find the best Iron Condor entry points. Here are some tips to use the filtering function to find the best Iron Condor entry points. Options Scanner is designed to find high probability and high return Iron Condors in seconds. Options Scanner Settings to Find the Best Iron Condor Stocks We can do that by picking stocks with high market capitalisation to reduce the risk of manipulation. We also need to find underlying opportunities less prone to large fluctuations. Since we want to sell high and buy low, we need to sell to open at high IV, then buy to close when vega causes the option's value to decay at low IV. Vega is the changes to options value with respect to changes in IV. So no matter our Iron Condor setup is profitable or not, we prefer to close the trade or roll it to the next month before 14 days to expiration, to reduce gamma risks. Gamma grows when the options are close to expiration, leading to big fluctuations in options value. It is also the acceleration to options prices with respect to changes in stock price. Gamma is the changes to delta with respect to changes in stock price. So we can be patient and earn a profit as time passes without much price fluctuation. Theta is the changes to options value with respect to changes in time.įrom our experience, selling OTM options with more than 30 days to expiration have a predictable time value decay. When selling Iron Condors, we want both theta and vega to depreciate the options prices, so we can sell high price Iron Condors to open, and buy low price Iron Condors to close. When the Strangle is losing, we can roll the options to the future to repaire the Strangle. ![]() When an Iron Condor loses, we can roll up or roll down the Vertical Spreads to repair the Iron Condor. While the Iron Condor has a limited maximum loss, the Strangle has unlimited losses if the underlying price move beyond the Put and Call strike prices. While the Iron Condor has a limited maximum loss, the Strangle has unlimited maximum losses. Maximum loss of an Iron Condor = width of the Vertical Spread strikes x 100 - premium collected What Is the Difference Between Iron Condor and Strangle?Įven though both the Iron Condor and the Strangle are delta-neutral strategies, but they have different profit analyses.īy comparing the profit analyses of the strategies, we see both neutral options strategies profit from the lack of price movement. The maximum loss is also capped if we are wrong. If the underlying stock price doesn't move beyond the boundaries, the Iron Condor strategy will be profitable. By combining a short Call Spread and a short Put Spread we get an Iron Condor. And the Call Spread defines the upper boundary of the price movement. The Put Spread defines the lower boundary of the price movement. When we combine selling a Call Spread and a Put Spread we get an Iron Condor. If the underlying price doesn’t fall, the Put Spread value will depreciate and we earn a profit.īut if the stock price decreases below the Put strike, the maximum loss is also the width of Spread times 100 minus premium. If the underlying price doesn't drop, the Put Vertical Spread will depreciate in value and we earn a profit. We also receive a premium when we sell a Bull Put Spread option. If the underlying price doesn’t increase, the Call Spread value will depreciate and we earn a profit.īut if the stock price increases beyond the Call strike, the maximum loss is the width of the Vertical Spread times 100 minus premium. If the underlying price doesn't increase, the Call Spread value will depreciate and we earn a profit. We receive a premium when we sell the Bear Call Spread. Let's recall the profit analyses of selling a Put Spread and a Call Spread. As long as the underlying price does not exceed or drop below the strike prices of Put and Call before expiration the four options contracts will depreciate in value and we profit as an option seller. The Best Iron Condor Entry Points Right NowĪn Iron Condor works by selling a Put Spread and a Call Spread to define a range you can profit from.Options Scanner Settings to Find the Best Iron Condor Stocks.What Is the Difference Between Iron Condor and Strangle?.
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