Profit In The Current Stock Market By Using The Condor Spread
Want to gain your personal financial freedom, even during in these trying economic times? If you are willing to handle your personal expenses responsibly, then using the Iron Condor Spread, one of the best option trading tips available, your money can be put back to work for you. Time may be needed, but the rewards for your patience are often worth it.
Compared to other option trading systems the Iron Condor Spread is more advanced, because it results in higher profits, and lowers the potential for loss. On the same underlying security the Iron Condor Spread uses a spread of bear-call and bull-put options. Built out of the Condor Spread, The Iron Condor Spread yields a net credit through the doubling of credit on a single spread position.
How does this option trading tip work to make you a profit? It works by using two spreads, which creates two separate break-even points. A lower break-even and an upper break-even. Anytime a stock's price stays above the lower break-even and beneath the high break-even, you can count on profit being generated.
Before embarking on this option trading tip, make sure you have plenty of available cash in your account before you start. Many online option trading brokers will not let you enter this kind of spread without the proper funds needed to fulfill the margin requirements.
How does the Iron Condor Spread provide advantages? 1) This type of option trading is a completely neutral stratagem. 2) By not owning stock itself you are able to enjoy an uncovered position. 3) The potential on returns is increased by both put and call options. * Using double credit provides both controlled risk and lower potential risk.
The Iron Condor Spread should be used when the price of the underlying asset is expected to change very little throughout the life of the options. Maximum profit is achieved at expiration when the underlying asset equals the middle strike. Furthermore, the customization range that this option trading system allows is admirable. Hereas the profit calculation:
Maximum Profit = Net Credit Profit % = (Credit gained from short legs/greatest difference in strike) x 100 Max Loss = Greatest difference in the consecutive strike a" net credit . When using this formula the maximum profit is limited to the net gained credit. The maximum loss is limited to the level of the maximum calculated loss
Remember, the benefits of the Iron Condor Spread can be plentiful but be forewarned: gaining profits from the Iron Condor takes a lot of time and monitoring, and necessitates the proper analysis for entry. Furthermore, remember that high trading levels are required. Traders with lower trading levels cannot execute the Iron Condor Spread strategy.
Compared to other option trading systems the Iron Condor Spread is more advanced, because it results in higher profits, and lowers the potential for loss. On the same underlying security the Iron Condor Spread uses a spread of bear-call and bull-put options. Built out of the Condor Spread, The Iron Condor Spread yields a net credit through the doubling of credit on a single spread position.
How does this option trading tip work to make you a profit? It works by using two spreads, which creates two separate break-even points. A lower break-even and an upper break-even. Anytime a stock's price stays above the lower break-even and beneath the high break-even, you can count on profit being generated.
Before embarking on this option trading tip, make sure you have plenty of available cash in your account before you start. Many online option trading brokers will not let you enter this kind of spread without the proper funds needed to fulfill the margin requirements.
How does the Iron Condor Spread provide advantages? 1) This type of option trading is a completely neutral stratagem. 2) By not owning stock itself you are able to enjoy an uncovered position. 3) The potential on returns is increased by both put and call options. * Using double credit provides both controlled risk and lower potential risk.
The Iron Condor Spread should be used when the price of the underlying asset is expected to change very little throughout the life of the options. Maximum profit is achieved at expiration when the underlying asset equals the middle strike. Furthermore, the customization range that this option trading system allows is admirable. Hereas the profit calculation:
Maximum Profit = Net Credit Profit % = (Credit gained from short legs/greatest difference in strike) x 100 Max Loss = Greatest difference in the consecutive strike a" net credit . When using this formula the maximum profit is limited to the net gained credit. The maximum loss is limited to the level of the maximum calculated loss
Remember, the benefits of the Iron Condor Spread can be plentiful but be forewarned: gaining profits from the Iron Condor takes a lot of time and monitoring, and necessitates the proper analysis for entry. Furthermore, remember that high trading levels are required. Traders with lower trading levels cannot execute the Iron Condor Spread strategy.
About the Author:
TheScienceOfTrading.com provides 90 free minutes of videos on option trading systems and provides a complete and detailed learning to trade options for beginners to experts.
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