Hi all and welcome to this article by San Jose Options Mentoring. The purpose of this instructional writing is to warn beginning and intermediate option traders about the risks involved in trading Iron Condors. Although Iron Condors can produce monthly income, they can also produce catastrophic losses to your trading account if you do not trade them correctly. Now, unfortunately most books and most option courses that teach how to trade the Iron Condor, push that the Iron Condor should be traded near expiration. This strategy will work for a few months in a row, but then when the market wants to wake up, the trader using this option strategy will also wake up to find most of his trading capital gone.
In this article you'll find an embedded video. This video is a good demonstration of how NOT to trade Iron Condors.
This is the strategy that is taught by 99% of the courses on the Internet. Don't be misled, and don't fall into the trap. Take a look at this video and see firsthand the stress and the risk involved with this option strategy.
As this option spread gets closer to expiration it becomes more volatile and more risky. Even though the trade might be yielding a profit, the option trader can lose all of the profit and more in one single day. This is because of the option Greeks. The Gamma is extremely high which causes the Delta position to change in an uncontrollable manner. Please watch the video at the six-minute mark to understand better what I am talking about.
Well, to wrap things up, I would like to say thank you for reading this article and watching the video that goes along with it. I hope you have learned some of the things about the risky Iron Condor. Now don't get me wrong. The Condor is not a bad strategy. The problem that I see is that most people trade this option spread too close to expiration, and this is a serious problem. There is a much better way to trade this strategy. If you would like to learn how to do it safely, then I highly recommend that you visit San Jose Options because they teach the best Iron Condor that I have ever seen.
Author Resource:
Learn the Secrets to Trading the Iron Condor at San Jose Options Trading and Mentoring.
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