Every person likes to become a profitable lifetime trader. Is it possible for every one? Yes. Judgment based proven results are helps to play on trading platform. Iron condor is the name of an advanced, neutral-outlook, options trading strategy that involves buying and holding four different options with different strike prices. It is a limited risk, limited profit trading strategy that is structured for a larger probability of earning a smaller profit when the underlying stock is perceived to have a low volatility. Here I’ll discuss about basic knowledge in iron condors to set up an iron condor, the options trader sells a lower strike out-of-the-money put option, buys an even lower striking out-of-the-money put option, sells a higher strike out-of-the-money call option and buys another even higher striking out-of-the-money call option. The iron condor is a credit spread as a net credit is received when putting on the trade. There are different options are
Iron condors are very similar in structure to iron butterflies, but the two options located in the center of the pattern do not have identical strikes. Having a strangle at the two middle strike prices widens the area for profit, but at the same time lowers the maximum potential profit. The sole purpose of the iron condor options strategy is to profit from this tendency markets have to bounce around. It performed in four level options Vanilla options means the theoretical value of an option can be determined by a variety of techniques. These models, which are developed by quantitative analysts, can also predict how the value of the option will change in the face of changing conditions. Hence, the risks associated with trading and owning options can be understood and managed with some degree of precision. Exotic option means a derivative which has features making it more complex than commonly traded products. These products are usually traded over-the-counter (OTC), or are embedded in structured notes. Options strategies means an option strategy is implemented by combining one or more option positions and possibly an underlying stock position. Options are financial instruments which give the buyer the right to buy or sell the underlying security at some specific point of time in the future or until some specific point of time in the future for a price which is fixed in advance. Options spreads are the basic building blocks of many options trading strategies. A spread position is entered by buying and selling equal number of options of the same class on the same underlying security but with different strike prices and/or expiration dates. These are the options trading methods in iron condor trading system. Lets hands up to become a good trader.