Iron Condor 🦅

• “Cheap”, “Risk Capped”, “Safe Neutral Strategy” for either Range bound market or Volatile market.

Features 🌈

• Cheap
• Risk Capped on both sides.
• Awkward to adjust.
• Aka “Credit Spread”.
• Combination of “Credit Put Spread” + “Credit Call Spread”
  • Short Iron Condor - Profit if Range Bound.
  • Long Iron Condor - Profit if Volatile.
• Delta Neutral
• Only One side is tested, Other side is not tested. Hence we can do adjustment on only one side.

Conditions ☝🏼

Do Iron Condor IF

1. IV > HV
2. 30+ IV Rank
3. Bearish Volatility
4. For any IV or Falling IV
5. For Weekly or Monthly Expiry. ( 60 Days )
6. Checkout [[9 Rules of Options - Sourabh Gandhi]]

Remember 🤔

1. Medium Margin/Capital Requirement
2. Medium Risk
3. High Leverage
4. Capped Risk
5. Non Directional
6. Probability of Profit around 60%.
7. Check for liquidity.

Step by Step Placement of Order 🪜

1. Select Strike Price as per Spot Nifty. ( 100 Pts Rule)
   1. Note Down Current Strike Price.
   2. Note Down X & Y
      • X = Price/Lot of Current Strike Price - 100 PE
      • Y = Price/Lot of Current Strike Price + 100 CE
   3. X + Y = Z, Round Off Z.
   4. Consider Z as Pts.
      • Subtract Z from PE
      • Add Z to CE
   5. Note down 4 Orders & Price.
      • 
2. Make Scenario to know Risk Reward.
   • 
3. Create Basket in Zerodha Kite
   • Note Down Margin.
   • Make sure Atlest 5% more than margin money available.
   • Note Down ( Expected Profit to exit) 4% * Margin to 5% * Margin.
   • Execute later.
4. Trade Execution
5. Book Profit ( Conservative Basis )
   • Important & Difficult
   • Don’t Wait for Maximum profit.
   • 4% to 5% weekly profit wrt Margin Deployed.
   • Square off 4 trades simultaneously.

Suggestions 🧙🏼‍♂️

• Monthly Iron condor is better than weekly Iron Condor position as the T+0 line is less steeper.
• T+0 less steeper, better position.
• T+0 line, dotted line, How position will behave today.
• Other line, how it will perform expiry.
• Monthly Iron Condor < Weekly Iron Condor
• Weekly have lot more negative gamma than monthly IC.

How to take Monthly IC position using delta

1. Check Greeks on each Strike Price.
2. Positive delta value for call option.
3. Now determined Call Option, take other 3 positions.

eg: Calculations

eg: Chart

Diagram 📈

Adjustment

Adjustment 01

Adjustment 02

• Convert Iron Condor to Iron Butterfly.
  • Leave one Loss making sell order. Square off the rest for profit.
  • Then make an Iron Butterfly. Remember you are already in profit.

Iron Condor Backtest

• Gave around 38% for jun to sep 2022.
• Gave around 35% for jan to mar 2022.

🏷️Tags : #Investments💷/Options-Trading🎛️ 📚Reference :