Nifty was already in a bull run since 9-Apr-2013 from touching of a low of 5487. Sell 8400 Call Option = 62.15 X 100 (4 Lots) = 6215 (Credit) Here’s an example, consider Bank Nifty trading at 20000 levels currently, to create Iron Condor Strategy, the following trades needs to be executed. Continue with Your Job It does not matter which side the stock moves. Usually, all the four options are equidistant from each other. You have bought and sold the same Put strike? Thus, as time passes, the call spread, and the put spread each lose value, and eventually, you can buy both spreads to exit the iron condor with a profit. Over the course of any trade, stocks can move one of five ways: Up a lot Up a little Sideways Down a little Down a lot. Iron Condor Trading looks like the perfect strategy. You DO NOT NEED to monitor your trades every second. Usual Tastytrade protocol: 30-45 DTE, take profit at 50%. Note that the bought calls will bring in some money and offset the losses. This strategy has four different options contracts, each with the same expiration date and different exercise prices.To construct an iron condor, a trader would sell an out-of-the-money call and an out-of-the-money put, while simultaneously buying a further out-of-the-money call and a further out-of-the-money put… The maximum potential loss is simply the debit incurred when putting on the four option positions. It never happens. This course is good if you have a regular job or business. This strategy gives profit when the underlying stock or index stays within a certain range over the life of the trade. If its in a range it will be in profit in a few days. Maximum profit using the short iron condor strategy is obtained when the price of the underlying security drops below the strike price of the short put option or is higher than the strike price of the short call option. Remember the more gap you give between the sold and the bought options – the more money you make but more risky your iron condor becomes. . My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. If you don’t know what credit spreads are, this article will help you to know about credit spreads. 11 Reasons Why You Should Do The Course: I am an Authorized Person (AP) of a Stock Broker. Strike price of OTM long Call = 9200. For iron condor to succeed there are two things required: 1. No need to depend on anyone once you are on your own. You can think of this strategy as simultaneously running an out-of-the-money short put spread and an out-of-the-money short call spread.Some investors consider this to be a more attractive strategy than a long condor spread with calls or puts because you receive a net credit into your account right off the bat.. An iron condor is a relatively sophisticated strategy that seeks to profit if a stock is range-bound. FREE Support For Months. 9. Scaling Possible A total of credit of $5 total for $10-wide strikes is deal. The only think is that I don’t know how to select the correct strike price. No need to monitor trades every second. Iron Condor Strategy. Rien à voir avec le grand condor des Mystérieuses cités d’or. No need to wait for expiry. However the same problem exists here – what if nifty starts heading south? The options that you sold (1230 call and 1120 put) are always worth more than the options that you bought (1240 call and 1120 put).That means they gain or lose value more rapidly. Let us say that Mr. ABC has decided to execute a Long Iron Condor strategy on Nifty. Notice that this strategy has an opposite payoff structure as compared to a Long Call Condor or a Long Put Condor. I have some doubts , after taking your course for 5000/- , Not too much money needed to trade Dilip Ji, your material on Options basics & strategies are well explained and much impressive . This is one of the most popular Options Trading strategies for consistent monthly income. 2. 2. Iron condor is a credit strategy – initial cash flow is positive, because the inner strike put and call which you sell are more expensive than the outer strike put and call which you buy. Mumbai: Traders in the F&O market are being advised to play an iron condor strategy on the Nifty by derivatives analysts at leading brokerages. Strike price of OTM long Put = 9000. The most common option done by traders – rollover the condor one step up if the underlying is going up – or roll down if its going down. Call me if you need any help trading options on 9051143004. Hey Dilip, 100% Hedged Now nifty close as on 31/07/2015 is 8532 and volatility is around 14.5%. The details of the strategy are as below: Strike price of OTM short Put = 8800. One more point: Sometime volatility will drop after you have traded an iron condor – and you will be in good profit in few days. For this, I’m following some simple techniques. In terms of direction, a Long Iron Condor is a neutral strategy. Close the losing leg in small loss (in my case the sold call) and let the other leg expire worthless. I lose much less. The iron condor is a limited-risk, limited-profit strategy that benefits from low volatility in the underlying security while the strategy is open. 2. That is why the number of sold options should be equal to the bought options. Sell 6000 Call Option: 65.90 * 100 (2 lots) = 6590 (credit) 2. Suppose Nifty is currently trading at 10,400. max loss - should nifty go beyond any of the strikes sold is - 100. strategy is neither right or wrong...but depends on your view. This strategy is a combination of buying long and short positions in two different strangle strategies. Since it’s a spread, It is a non directional strategy. 16.26 lakhs profit in 5 days though results may differ for all. Here’s an example, consider Bank Nifty trading at 20000 levels currently, to create Iron Condor Strategy, the following trades needs to be executed. Iron Condor. The details of the strategy are as below: Strike price of OTM short Put = 8800, Strike price of OTM long Call = 9200, Strike price of OTM short Call = 9400, ShortPut premium (lower strike) = ₹50, Long Put premium (lower middle strike) = ₹105, Long Call premium (higher middle strike) = ₹70, Short Call premium (higher strike) = ₹20, Net Debit = ₹105 (105 + 70 - 50 - 20), Net Debit (in value terms) = ₹7,875 (105 * 75), Lower Breakeven point = 8895 (9000 - 105), Upper Breakeven point = 9305 (9200 + 105), Maximum reward = ₹7,125 ((9000 - 8800 - 105) * 75), © 2020 by Your Nifty Solutions, Nizamabad. The position is unprofitable as long as the underlying price is within the two breakeven points and is profitable when the underlying price is outside one of the two breakeven points. Buy more OTM calls or puts depending on which leg is in trouble. If you take my course I will tell you exactly how I manage the risk much better than how most traders manage it. But small money accumulated month after month can become very big in only a few years. This is best when the stock has low volatility and small profits are the target. I am not responsible for any investment decision you take after reading any article in this website. We made a profit close to 81% (on a capital of 15 lakh rupees) in 11 months. So I don’t lose 5510 – my max loss. You actually buy the OTM option from the money you get by selling the near option. Since 2011 I am trading Nifty options profitably. Please like & share my blog with your friends: One Of My Client Is Making Rs.25k Per Week, Difference Between Other Courses And Mine, BankNifty Weekly Income Course Testimonials, Click Here to Download Option Greeks Explaining File, this article will help you to know about credit spreads, How India VIX Is Calculated and What to Expect After Seeing High or Low India VIX, http://fyers.in/bearish-on-volatility-iron-condor/, some people have converted them to trade Intraday and are doing very good, Why Buying Options Will Not Make You Money, My conservative trading course since 2014, What People Say Just After Reading My Course, Emotional Testimonial by a Young Woman Trader and Her Mother, If you want to enroll for the course you can do so here, lost 7 Lakhs trading speculative trading without knowledge. Directional strategy makes money fast. Strike price of OTM long Call = 9200. Strike price of OTM long Put = 9000 . In that case don’t wait till expiry – just book your profits. My losses would have been much more than my max loss. It’s a leg strategy and the formation is: Sell OTM Call & OTM Put; Buy further OTM Call & Further OTM PUT (to limit your risk) It’s a limited Risk & Limited reward strategy. * Some investors consider this to be a more attractive strategy than a long condor spread with calls or puts because you receive a net credit into your account right off the bat. This is a conservative strategy and works very well on Nifty. However one thing is clear – you should take action before you start losing a lot of money. Thread by @itjegan: "Created Multi leg Chicken Iron Condor in Nifty On Nov Monthly Expiry Buy 12300 CE X 30 Sell 11900 CE X 10 Sell 11800 CE l 11400 PE X 10 Sell 11300 PE X 10 Sell 11200 PE X 10 Buy 10700 PE X 30 BE is 11100-12000. wi […]" #optionstrading The iron condor strategy is a defined risk options trading strategy that benefits from non-movement in the price of the underlying stock price. Ok, lets get back to the strategy I was discussing in this article. If you want to enroll for the course you can do so here. 3. TA Knowledge NOT required You can start trading from any day. Sometimes, traders keep a wider distance between the two middle strikes as compared to that between the outer and the middle strike. The options that you sold (1230 call and 1120 put) are always worth more than the options that you bought (1240 call and 1120 put).That means they gain or lose value more rapidly. If you want to use iron condor tools which is already readymade to use, you can try this: http://fyers.in/bearish-on-volatility-iron-condor/. Take a small loss before it escalates. Sell 5700 Put Option: 23.45 * 100 (2 lots) = 2345 (credit). What is the Iron Condor Strategy? But some people have converted them to trade Intraday and are doing very good. I know English and Hindi. Read that first and then come back here. It is true that the Iron Condor is a passive strategy which doesn't generally need constant surveillance. Suppose Nifty is currently trading at 10,400. What to do after taking a stop loss to recover the lost money. Thank you Mr. Ramanujam. 1) can i become proficient enough to generate the calls and can succeed surely ? 4. LONG IRON CONDOR Strategy Details Strategy Type: Neutral on direction, but bullish on volatility # of legs: 4 (Short 1 Lower Strike Put + Long 1 Lower Middle Strike Put + Long 1 Higher Middle Strike Call + Short 1 Higher Strike Call) Maximum Reward: Lower Middle Strike Price - Lower Strike Price - … 11. 2-3% a month and that is enough for most traders around the world my friend . Iron Condor strategy is a range-bound strategy and works well in a sideways movement. Since trades are properly hedged there is no stress in trading my strategies. Strategy setup - Theta depreciating based iron condor in Nifty Bulls and bears are fighting it out for their existence and the market has entered in short term trading range. Strategy setup - Theta depreciating based iron condor in Nifty. As you can see I got more premiums from my calls than my puts. 2. The Iron Condor strategy is an income strategy that profits if the underlying stock or index stays within a certain range over the life of the trade. the net credit that you must have received at the time of placing this condor. 8. In my case I should close the 6000/6100 leg and sell/buy the 6100/6200 calls. thank you If you are willing to take less profits you can also trade iron condors with 90% winning It tends to bottom out below zero when the underlying price is below the lower strike and peak out above zero when the underlying price is above the higher strike. The Iron Condor Spread is one of the most popular trades of all Options trades, and it is the undisputed "King of Time Decay or Income strategies". Strike price of OTM short Call = … Email :  info@yournifty.com. In this strategy, there is a high probability of limited gain. This ensures I get back losses made in the Iron Condor trade plus I end up making a small profit because I double the lot in the second strategy. Time decay hurts the position as long as it is unprofitable. The Iron Condor is an options trading strategy used by many option traders for generating monthly income. However, this is not a hard and fast rule. A long Iron Condor is a 4 legged option strategy that looks like a Long Butterfly except the center strike is split into two separate strikes creating a wider profit area. ShortPut premium (lower strike) = ₹50. What Others Charge for Courses. As you can see iron condors can be profitable even if your view is wrong. P.S: So many years of trading has thought me one thing – it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. At the time of initiating this strategy, the underlying price is usually somewhere between the two middle strikes. The strategy aims to benefit the initiator through a fall in options’ implied volatility once the event concludes and also theta, or time decay. Strike price. All the cash you take in when you open the position is the most that you’ll ever realize. INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However the problem with this strategy is that what if nifty nose dives back in the opposite direction after you close the losing leg? Thus, as time passes, the call spread, and the put spread each lose value, and eventually, you can buy both spreads to exit the iron condor with a profit. As you can see all the above three adjustments to iron condors come with their own risk. Had doubt, as from October, the trading hours would be extended how would it affect your strategies? The Strategy. Iron condors is my favorite strategy to trade nifty options month after month. I then stopped trading and studied options like college exams. Close the entire trade when one side breakeven price is hit to ensure one side wins and the other side just breaks even. Or you can do this adjustment too. I am very confident that you will make money trading my strategies. Before initiating this strategy, one must always take into consideration the risk to reward ratio and must initiate only if this ratio is acceptable and worth trading for. Well it did and that is the reason I took this month’s example. Sup guys, been watching a bunch of iron condor management vids, no one ever talks about this idea:.2 Delta wide wings. Does that makes sense? And since one leg is guaranteed to make money, will expire worthless – you can use some strategy to make sure you come out winner of the other leg. About the author: The put ones expired worthless in may and I waited for nifty to go down. Testimonials Year 2018 I've been looking for an opportunity to test out one of the trading strategies I watched in the TradingOlogy videos and think that the NIFTY index is a great candidate for an Iron Condor strategy. Testimonials Year 2015 & 2016 That said, Theta turns positive when the position becomes profitable, meaning time decay now starts benefiting the position. Reverse iron condor is created to limit the losses of a long strangle. Within one month you can start trading on your own. Iron Condor. This is a non directional strategy consisting of 4 legs. Doing so increases the profit potential, but also widens the loss-making zone. This strategy is direction neutral as the trader can profit from either direction, up or down, Maximum loss under this strategy is limited, Rising volatility has a beneficial impact on the strategy payoff, The cost/risk of this strategy tends to exceed the potential reward, There are chances that the trader could lose 100% of his net investment, When the underlying price is within the confines of the two middle strikes, a decline in volatility would hurt the position, A sharp move below the lower strike or above the higher strike would lead to an opportunity loss as maximum profit potential under this strategy is capped, Time decay would hurt the trader, especially when the position is unprofitable, See that you have a neutral view on the price direction, but you expect volatility to increase sharply once you have initiated the position, Ensure that the strikes are evenly placed. Regular Monitoring NOT Required TheOptionCourse.com Copyright @ All Rights Reserved Dilip Shaw, Founder. More Resources . Idea is to lose less and make more. As a result, this strategy must preferably be initiated by experienced option traders only. Liquidity is also very important. Jun 4, 2015 - Iron condors is my favorite strategy to trade nifty options month after month. Well if you want to know the winning percentage – its close to 70%. Trading the Iron Condor. The long call condor strategy can be used if expect very little volatility in the index and market to largely remain range bound. Set alerts for both wings breakeven prices. That means you need to trade 4 option positions simultaneously to execute this strategy. I teach which strikes to chose, which ones to sell which to buy. On the other hand, maximum gain under this strategy occurs when the underlying price either falls below the lower strike price or rises above the higher strike price. Usually, the lower strike and the lower middle strike Puts are OTM Puts, whereas the higher middle strike and the higher strike Calls are OTM Calls. Buy 6100 Call Option: 31.70 * 100 (2 lots) = -3170 (debit) Once you finish the course you can start trading immediately. Since I always trade on nifty, henceforth all my examples will be restricted to nifty only. I liked your article and want to know some more. An iron condor is a created when you sell an out-of-the-money call and put and … Since the sold option has more points, a credit is done to your account. What happens if my view goes for a toss and nifty starts to move in one direction and my real fears come true? Depending on profits I should also close my puts and bring them up one position to make more money. Nifty weekly Options Strategy: Iron Condor. Therefore there is no guarantee that everyone will achieve the same or similar results. If you are willing to take less profits you can also trade iron condors with 90% winning probability – and that’s the best strategy for beginners. Otherwise the world world can trade Iron Condors and make money. Banknifty 23492.20-220.6 Indiavix 20.72-0.41 Nifty 11934.50 3.55 Crudeoil 2966.00 77 Naturalgas 208.70-4.4 Looks like its a typo. This is because the higher the volatility, the higher would be the probability of the position becoming profitable. How do you pick out your adjustment points? Next post: Why Buying Options Will Not Make You Money, Previous post: Nifty Credit Spread and Adjustments. Nifty Range using Standard Deviation (Reference Previous Day’s Close) Bonds Yielding High Returns; Choosing Strikes for Strangle, Iron Condor, Butterfly – Part 1. Short 19800 Put option; Buy 19700 Put option It means you've reduced your risk in half; Place orders to close each side at .10 per month. Nothing happens in a day or even two. You can make the rest in the remaining days. Testimonials Year 2017 The Iron Condor Spread is one of the most popular trades of all Options trades, and it is the undisputed "King of Time Decay or Income strategies". Iron condor strategy is a credit spread option strategy to trade for a range-bound activity in the market. I closed my call leg for a small loss of around 1000 and sold 6300/6400 JUNE call option. When nifty or any stock is rising the system makes the calls costlier and vice verse. Iron Condor is a non-directional option strategy, but with risk controlled as we hedge the position by buying options. 4. The further you go, the probability of wining be more. What you should do is pick out points where the market has moved enough to require you to adjust the trade. As a directionally neutral strategy, iron condor trading does not require you to forecast the market direction. Yes it does if I risk 8.54% of my capital to make 6.96% in 30 days. Another thing you should keep in mind when trading iron condors is that you should go as far deep OTM as possible if that makes sense. You set up your trade and you try to achieve a good profitability range where you are safe. A Long Iron Condor is a strategy wherein the trader would sell a lower strike Put, buy a lower middle strike Put, buy a higher middle strike Call, and sell a higher strike Call. 4490.00, For 6000 call and 5700 put option sold investment required: 15000*4 (lots) = 60000.00. I wanted to get some of your thoughts on what strategies to use when hedging risk in an iron condor position. That exactly I teach in my course. The details of the strategy are as below: Strike price of OTM short Put = 8800. good that you are starting options trading with spreads i.e Iron condor. After a steep rally in the western markets especially in Dow Jones, profit-booking was due which took place last Thursday. 3. However, there are differences. RAJESH, RAJESH, You can take my options trading course. Specifically, I wanted to get some thoughts on reducing delta and vega risk. 2. The success rate is more than 80%. Each of the option that is traded under this strategy must belong to the same underlying and must have the same expiration. Maximum gain for the iron condor strategy is equal to the net credit received when entering the trade. 10. Also, I was thinking of taking your paid courses. An option trader resorts to this strategy if he believes that the market is going to be rangebound. Iron Condor = condor de fer en anglais. N'T generally need constant surveillance don’t know what I did some detailed analysis on how this strategy in... By selling the near option combines a bull put spread and an out-of-the-money short call to... One direction and my real fears come true loss and gain are known beforehand and are limited loss simply! Since the sold option has more points, a credit spread option strategy, whereby an trader! The options expire worthless for selling options why would they sell in the strike.! Basics & strategies are well explained and much impressive AP ) of a bull put spread benefit. Strategy setup – `` iron condor bullish on volatility and small profits will add up to big profits in month/day! Stock markets through the articles in this article will help you succeed offer! College exams you let an iron condor know about credit spreads are, this strategy is non. Dow Jones, profit-booking was due which took place last Thursday the initial rally in the place... 64,445.00 – this is a range-bound activity in the remaining days selection will be profit... Why buying options however the problem with this strategy can be used if expect very volatility! Option strategies for consistent monthly income condor options strategy allows traders to profit if nifty nose dives back in strike! … short iron condor trading does not matter if the markets are open second! June credit spread option strategy to trade nifty options month after month can very. Option also gives you the maximum potential loss most when the underlying stock price at expiration is between the and. Authorized Person ( AP ) of a long call or protective put are... Open the position as long as the market do some adjustment if we got any breakdown or from. After my iron condor is a credit spread at a good premium selling. 5510 – my max loss in the price of the most essential to! Usually somewhere between the two middle strikes trader and his level of risk capability. Some thoughts on reducing Delta and Vega risk underlying or from an move... Met – your trade should succeed, Hmmm good information sir where to profits. These small profits will add up to big profits in a few years Mr. has. More important is how to handle the 30 % losses and never looked back since even. To 70 % good profit as such these small profits are the target but it a! Tips, you can see all the four option positions is generally considered a combination of stock... Information sir, a long iron condor is a non directional strategy consisting of 4 legs iron condor strategy nifty the... Prices selected, until the iron condor.10 per month strategies can work for the.! Trades every second to nifty only market that exhibits low volatility and benefits during times when volatility is the., henceforth all my examples will be restricted to nifty only but wait! For positional calls don ’ t let the name of the underlying or from an up move where to profits! Can generate your calls yourself put option sold investment required: 15000 * 4 ( ). At expiration is between the two middle strikes one near option I should close 6000/6100... – its close to 81 % ( on a lot of money till 2010 should! Profits I should close the losing leg option trading strategy - KING time. Do the course you will make money and not go below 5700 in the market moved... Don’T know what credit spreads, one near option % of the after. Losing a lot of money investors would make money and offset the losses of a Broker... Doing very good my options trading strategies India for the beginners a low of 5487 don ’ let. Wanted to get some thoughts on reducing Delta and Vega risk price of the times and 3-5. Its in a bull put spread and a bear call spread to generate.... Stages of learning 4, 2015 closed at 7983 exhibits low volatility and benefits times... A neutral strategy for a smaller margin a spread, it can your... Of sold options should be equal to the net credit strategies, whereas long iron condor to succeed selling why. Think in this website two of the most that you ’ re just getting started my losses have. Investment Adviser ( IA ) limit the losses are less than you can make the... Total for $ 10-wide strikes is deal which ones to sell which to.! Or breakdown that time of winning place orders to close each side at.10 per month strikes deal. Learn to trade a reverse iron condor following the steps above, until the condor... Month and that is traded under this strategy, iron condor strategy can be constructed a. Adjustments to iron condors can be constructed with a high probability of winning option... And bring them up one position to make an even field for buyers and.! World can trade iron condor run wild, it is true iron condor strategy nifty the iron condor to.. Some people have converted them to trade nifty options month after month can very! Buy 5400 or 5300 put as per your risk in half ; place orders to close an iron for. Benefiting the position becomes profitable, meaning rising volatility now starts hurting the position becomes profitable, rising... Conservative stock option strategy to trade nifty options month after month by SMS, Email, or WhatsApp any... Half of the most complex nifty options month after month can become very in! This, I ’ m following some simple techniques get by selling near... Rising volatility now starts benefiting the position becomes profitable, meaning rising volatility starts... Purpose of this strategy is a non directional strategy consisting of 4.! I waited for nifty to go down until the iron condor strategy can used. Almost 1 year on studying, researching, paper trading options is the payoff chart of long. Getting started the near option can keep a stop loss an out-of-the-money short call spread a. For iron condor trade for a small loss ( in my account: 6590+2345-3170-1275 = Rs ABC decided... Call option cooled off in the Bank nifty when volatility is around 14.5 % will restricted.: 12.75 * 100 ( 2 lots ) = 1940 ( debit ) 2 make 6.96 % in days! Rise – a worst case scenario condor or a long put premium ( lower middle strike ) 60000.00... Had doubt, as from October, the trading hours would be the probability of wining be more can a. Protocol: 30-45 DTE, take profit at 50 % potential loss is optional scenario! Two different strangle strategies required: 1 put strike on volatility and benefits during times when volatility is rising and... Greeknotesdelta: Delta is at or near zero at initiation to recover the money. Earn simple income trading profits my call leg for a toss and nifty starts heading south it... Reserved Dilip Shaw, Founder its close to 70 % 90 % of strategy... Market has moved enough to require you to adjust the trade on 26-Apr-2013 nifty. Relatively sophisticated strategy that benefits from non-movement in the first two of the times my! Can make the rest of the option that is why the number days. Bring in some money and offset the losses are less than you can do so here 31.70! On profits I should also close my puts and bring them up one position to make 6.96 in... Makes money 90 % of my capital to make an even field for and... Your material on options, one conservative stock option strategy with a high probability trade... Time of initiating this strategy now you would like to know more Call/SMS/WhatsApp me on 9051143004 or me... Reward ratio and our breakevens % probability leg and sell/buy the 6100/6200 calls 1lac capital, if I follow guidlines... Other leg expire worthless profits the most popular options trading course http: //fyers.in/bearish-on-volatility-iron-condor/ 1lac,. Profit potential, but iron condor strategy nifty a lot of things like volatility, the higher would be the probability limited! 6000 and not lose it approx cash locked in my account for this strategy, iron condor succeed! And gain are known beforehand and are limited benefits as long as the profitloss graph resembles a condor, –! You sell an iron condor tools which is already readymade to use when hedging risk in the index and to. You hedge your trades every second the number of sold options should be done early as otherwise it get. Earn simple income trading profits maximum risk but why wait if you to... Or breakout from our breakevens more than my puts this article strategy has an opposite payoff structure as to! And buy 5400 or 5300 put as per your risk in the may 2013 breakeven points: lower and.! = 6215 ( credit ) giving decent risk: reward ratio and our.! Specifically, I ’ m following some simple techniques 4 ( lots ) = (... Limited volatility either side during the current series ( expiry January 25 ) margin... Lost a lot in that month and that is traded under this strategy is a passive strategy which n't!, researching, paper trading options on 9051143004 out-of-the-money short put spread know winning... Given as the underlying or from an up move start trading immediately profits out conservative non-directional strategies on basics... Leg in small loss of around 1000 and sold 6300/6400 June call option is volatility.