There are two faces to the iron condor. And thankfully for all us iron condor traders - neither face belongs to Babs. However, on second thought - it might be even worse...
See, usually when new option traders first catch wind of the iron condor trade, they completely flip out - believing it's the greatest thing since sliced bread. I know I did. Once I wrapped my head around the method I simply couldn't believe such a trade existed and that no one had ever told me about this thing before. I was convinced this was a holy grail type trade that left very little possibility for losses. Heck, it was just like they all said - it was like being the casino. Just spend a few minutes every month slapping one of these things on and the let it sail to victory - month after month after month...
Of course, new option traders go gaga over this strategy - and who could blame them. It seems to be a trade that's almost too good to be real.
And sadly, sooner or later (mostly sooner) they discover that it IS too good to be true.
But it doesn't have to be that way.
See here's the deal: The iron condor actually IS a pretty incredible trade. It CAN take very little time to manage. And it CAN produce some very consistent and truly outstanding and impressive returns.
It's that most new option traders don't take the time to really learn and understand this strategy. If they did, they would become aware that the trade has two faces - or two sides if you will - and one of those sides can be quite dangerous - that if is not managed and handled correctly can deliver some pretty ugly losses to a trading account.
Iron condors have a high probability of success - however that high probability of success comes at a steep price - which is an absolutely horrendous risk to reward ratio. And if not properly managed - and if the one trading them has no knowledge of the available iron condor adjustments - the returns that the iron condor can produce can be completely obliterated by just one bad month.
But again - it doesn't have to go down this way. The iron condor can be tamed - and trained - to produce consistent and reliable monthly income - even through the occasional one or two tantrums and fits it might throw around every year. The key is to learn how to correctly manage these trades from the get go - from the day they get put on - AND - how to utilize the various iron condor adjustments that are available to keep these trades profitable and from getting out of hand in whatever market condition. Learning adjust iron condors is the KEY.
See, usually when new option traders first catch wind of the iron condor trade, they completely flip out - believing it's the greatest thing since sliced bread. I know I did. Once I wrapped my head around the method I simply couldn't believe such a trade existed and that no one had ever told me about this thing before. I was convinced this was a holy grail type trade that left very little possibility for losses. Heck, it was just like they all said - it was like being the casino. Just spend a few minutes every month slapping one of these things on and the let it sail to victory - month after month after month...
Of course, new option traders go gaga over this strategy - and who could blame them. It seems to be a trade that's almost too good to be real.
And sadly, sooner or later (mostly sooner) they discover that it IS too good to be true.
But it doesn't have to be that way.
See here's the deal: The iron condor actually IS a pretty incredible trade. It CAN take very little time to manage. And it CAN produce some very consistent and truly outstanding and impressive returns.
It's that most new option traders don't take the time to really learn and understand this strategy. If they did, they would become aware that the trade has two faces - or two sides if you will - and one of those sides can be quite dangerous - that if is not managed and handled correctly can deliver some pretty ugly losses to a trading account.
Iron condors have a high probability of success - however that high probability of success comes at a steep price - which is an absolutely horrendous risk to reward ratio. And if not properly managed - and if the one trading them has no knowledge of the available iron condor adjustments - the returns that the iron condor can produce can be completely obliterated by just one bad month.
But again - it doesn't have to go down this way. The iron condor can be tamed - and trained - to produce consistent and reliable monthly income - even through the occasional one or two tantrums and fits it might throw around every year. The key is to learn how to correctly manage these trades from the get go - from the day they get put on - AND - how to utilize the various iron condor adjustments that are available to keep these trades profitable and from getting out of hand in whatever market condition. Learning adjust iron condors is the KEY.
About the Author:
To study a much 'safer' technique to trade the butterfly spread trade for steady income, click over to this iron condors site for down-to-earth step-by-step details on how to appropriately enter, manage, and ADJUST these trades.
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