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 Iron Condor
Issued on August 27 2010 par Strategies Options
Iron Condors are probably strategies of the most known amongst options traders.
Iron Condors are widely used by traders because they are very easy to use.
I - Reminders on Vertical Spreads We had seen that vertical spreads were a much better strategy than just short or long options one. That's because of the limited risk involved, less premium paid for the owner, less risk taken for the seller. II - Iron Condors Building As far as for a given date there is no way a spot being on two different level, traders usually sold an "out of the money" call spread added with an "out of the money" put spread. It is generally entered when the spot is equidistant between the lowest call strike and the highest put strike. III - Example: The spot is 100 Typical Iron Condor would be - short Put spread 90/80 is worth $ 2.75 - short call spread 110/120 is worth $ 3.11  This Iron Condor provides a credit of 5.86 which is the maximum gain for a risk of 10 a maximal possible loss of 10-5.86=4.14. Next : Iron Condor - SO Set Up Previous : Iron Condor: A First Approach Download the pricer here Advanced Strategies - INDEX Advanced Strategies - CHAPTER I Advanced Strategies - CHAPTER II Advanced Strategies - CHAPTER III Advanced Strategies - CHAPTER IV Advanced Strategies - CHAPTER V Strategies Options |
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