Iron Condor Options Strategy (TUTORIAL + Trade Examples)

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The iron condor options strategy is one of the most popular options trading strategies, especially among traders who prefer selling options with limited risk and want a neutral market outlook.

Selling iron condors (referred to as a "short iron condor")is a market-neutral strategy that profits when the stock price remains within a range, which makes it a high probability trading strategy that requires no predictions in regards to which way the stock price will move.

A short iron condor is constructed by selling a call spread and selling a put spread simultaneously.

Since selling a call spread is a bearish strategy (profits when the stock price remains below the call spread) and selling a put spread is a bullish strategy (profits when the stock price remains above the put spread), combining the two into a short iron condor results in a neutral position (no directional bias).

In this video, we'll cover:

- Selling iron condors explained (setup, explanation, max profit potential, max loss potential, breakevens)

- Historical trade examples so you can see exactly how the iron condor strategy performs in various scenarios.

- A demonstration of setting up an iron condor on the tastyworks trading platform. I even put the trade on and take it off so you can see how easy it is to get in and out of iron condor positions.

- How buying iron condors works.

Be sure to leave a comment down below with any questions you may have! tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.

[projectfinance]

And yes, I am FULLY aware that I took a loss on that iron condor trade to demonstrate entry/exit for you guys. Hope you enjoy the video! :)


-Chris

[jamesgalloway]

This is by far the best explanation of the short Iron Condor thank you very much for the information. You are terrific at teaching trading strategies.

[michaelwu]

I watched six videos (learned a lot from every single one), and the Iron Condor Options Strategy is by far the best one. The way you lay out the examples and calculations is very clear and easy to understand. I hope you follow this video's "template" in the future.

[mahendrarathore]

Superb fusion of passion, quality production, great illustrations and perfect delivery. Keep going Chris, Sky is the only limit for you.

[gulee]

The best explanation of iron condor strategy and its value change with underlying stock's price change, thanks!!

[mouadovic]

Can we close all the trades just (after a couple of days 3 4 ) if the position are positive or we necessarily have to wait until the expiry

[ghreiskhaleq]

Thank so much chris . I have joint SMB capital options for a premium . but they come no where near your lectures and easy explanation. as a matter of fact i watch your video first before i go to their videos. your are master trader indeed.

[taylorcollins]

I just held eye contact with you for 10 min. You did not blink once. Lol.
Great video. Love

[drewgibson]

Best option's channel on YouTube.

[LMF-ctlt]

Another great video Chris.
Do you use the Tasty Trade method of closing when 21 dte is left on the trade in most cases?

[rogerfesta_]

So helpful! Great production quality by the way. I often put videos like this on in the background but I was engaged the whole way through!

[smhaceofspades]

OMG I've needed this so much THANK YOU!!!!I've been mind numbing myself through E books and it's Greek this is refreshing.

[Gustavo-bihv]

Do you recommend we wait until expiration or close to expiration? Or should we close the trade way before this? Like when achieve 50% profit etc ?

[SwordOfTheSpiritt]

Thanks for these videos, I take notes along the way and learn a lot from them. One thing I think you should do differently is slow down your speaking and not cut out short pauses while your speaking since I'm sure lots of other people are also taking notes on these videos and it gets hard to keep track and process what you are explaining if you cut out the pauses when your speaking since it sounds like your talking nonstop without taking any breath, without letting the viewers process and take time to write down notes. Other than that, keep making videos on all the different option strategies, I've found them so helpful. I will definitely be sharing your channel with everyone else I know looking to get into trading options. In my opinion you're the best at explaining everything in as simple of terms as possible for people to understand, I walk away with a much better understanding after watching your videos than I do with anyone else on the internet. Also an idea I think would be pretty cool is if you created 3 playlists for your videos both already posted and for future videos as well, where you could put much more complicated options topics into an advanced options playlist, put videos with simpler but still hard topics into an intermediate playlist, then have a beginner playlist which is where you'd put videos explaining basics of options, expecting anyone watching a video in the beginner playlist is brand new to the world of options trading. Thanks again for providing so much, I honestly wouldn't know half of what I know when it comes to trading options if it weren't for your channel. Before I end off this comment, I have a few questions. I am 16 years old with a much smaller amount to trade with ($6000), what are a few of the options strategies you'd suggest I use being at age 16 and willing to take lots of risk since I have a lot to gain, but not much to lose. Also, what are your favorite high risk high reward strategies? And what ticker symbols do you usually trade these strategies with?


You may see this same comment on multiple videos to insure i get a response, no need to respond to the same comment more than once.

[heavenbound]

great video, just learning about types of strategies, I really liked this with a higher probability ratio, thanks again and thanks for the .pdf

[braddeicide]

Do you only use European options? With American you could be assigned on both spreads if there's way more movement then expected?

[shanthanalur]

I thought you mentioned fixing a losing trade, is there a way to go that ahead? Thanks

[rsferim]

Hello, quick question feel free to refer me to a video you might have on the topic.

Say I sell an Iron Condor on tastyworks. It starts going bad and is between the short put and the long put. The short put gets assigned. What does tastyworks do? Will I be holding 100 shares of the underlying and have the long put and short&long calls still open? Or will it automatically sell the shares and close the positions on the rest of the contracts? Thanks in advance

[unmilpatel]

Great video and super informative. Can you please help me with this question for the Short Iron Condor? So the current stock price of MGM is $13.8. Hypothetically, I think that the stock will stay between $13.5 and $14.5.
Price is as follows: In brackets - debit
Buy Put at $12.5: ($20)
Sell Put at $13.5: +$48
Sell Call at $14.5: +$32
Buy Call at $15.5: ($8)
Total Credit - $52
(1) Let’s say, the stock price at expiration is at around $12.7 which is at a certain loss. Would you wait for the $13.5 Sell put option to be assigned or would you close the position by buying the Sell put option?
(2) Let’s say the stock price at expiration is at $12.2 which is at max loss area. As it is In the money for both Sell Put $13.5 and Buy Put $12.5 options, how would you close these positions? Would Buy put $12.5 and Sell put $13.5 cancel each other out and we wouldn’t get assigned?
Looking forward to your response.

[vaugenheimnughnrn]

When youre selling a call you only profit at expiration if its below strike or is it like a short where you have to cover if it goes against you?