Business and Investment Adviser

What exactly is the iron condor? This is a trade that makes profit when the underlying market being used is range bound. Of course options traders try to utilize strategies that can take advantage of movements in the market. Many times – and maybe most of the times – there is not a lot of movement and the underlying just trades in a range, leaving the options being traded to expire with no value on expiration day. These types of trading range markets are ideally suited for the iron condor option trading strategy.

In order to properly trade the iron condor, you need to have a game plan in place first regarding adjustments. Before you even think about what strikes you will use you should have this management plan already in place. If you don’t you could get utterly destroyed by a big move in the market or the underlying and you wouldn’t have a clue what to do. Remember, the way that the iron condor is set up, with it’s skewed risk to reward ratio, it could take a few of these – or maybe even just one – to utterly destroy your trading account.