How To Trade Iron Condors on Robinhood (Passive Income Strategy)

The BEST Option Strategy - how I make passive income with iron condors!

Over the last few years I’ve tried pretty much all the strategies out there - buying calls and puts, selling covered calls, cash secured puts, strangles, straddles, the list goes on - but the one strategy that I found to be most successful is the iron condor. In today’s video I am going to teach you how to trade an iron condor on robinhood - which is probably the easiest way to learn and get a grasp of everything, especially as a beginner. Now we are going to go through 3 scenarios step by step to make sure everything is covered - first we’ll learn how to open the trade on the app, then we’ll see what happens during the trade and what we should be looking for, and then we’ll take a look at actually closing the trade as I know this is what a lot of people get confused about. We’ll also look at what happens if the trade goes against you and you end up losing on the trade - which is something we should know how to handle. Stay tuned to the end of this video because I will share with you my checklist of steps to follow whenever I place an iron condor trade.

Now to break it down in very simple terms - when you buy an options you are hoping for directional moves - so when you buy a call you are hoping that the stock goes up. When you buy a put you are hoping the stock goes down. If the stock goes in the direction you want then you will make money by the option contract increasing in value. Now on the flip side - when you sell options you are hoping that the stock does NOT have such a strong directional move - so when you sell calls you are hoping the stock does NOT reach your strike price - when you sell a put you are hoping the stock does NOT drop below your strike price - now you’re not necessarily hoping that the stock goes in the opposite direction but rather slowly move towards the strike price just not surpassing it. Now with an iron condor we are not taking a directional stance on the market. This in fact is a neutral stance by saying that I think the stock or index fund will trade flat and not have crazy directional moves. So with an iron condor what we want to do is pick two points - 1 point above the current stock price and 1 point below the current stock price. So to win this trade we want the stock to trade IN-BETWEEN these two points. If by the expiration date the stock stays in between these two points then you win this trade and make profit. An iron condor consists of 4 separate option trades. We are selling a call where we think the stock won’t reach, we are then selling a put where we think the stock won’t drop below. These are the two points that the stock needs to effectively trade between. We are then buying a call higher than the call we sold for protection, and we are buying a put below the put we sold, again for protection. Now I like to think of these two option buys as a hug around our trade - they are hugging the trade for protection - get it? So that made it easy for me to remember. Ok So when we open up an iron condor we are not paying out any money like we would be when we buy options. We are actually collecting a credit - just like we would be when selling options. So we are receiving a credit for putting on an iron condor trade. Our ultimate goal is for us to collect a credit, and then have the iron condor premium price to drop in value or expire worthless. If it drops in value we can then close the trade and keep the difference which will be our profit. If it expires worthless than we won’t need to close out the trade, it’ll just expire at $0 and you get to keep the entire premium.

Watch the full video for the live robinhood trades breaking down everything you need to know on how to trade iron condors and make some passive income!

I am not a financial advisor - none of the above video is meant to be taken as investment advice. I am just showcasing MY own strategy and my investments should not be tried and duplicated based solely off the information in this video for risk of losing money.

[orangecrushhex]

This is the best video you've done so far. These are real world examples of your trades rather than hypothetical ones. Well done!

[sm__]

no one on YouTube explained Iron Condor better than you bro. you did an amazing job. Thanks a lot

[seanallsbrook]

You really broke this down in very simple terms I was always worried about seeing the negative values but now I understand what I’m seeing

[mikewhite]

Showing the actual trade is REALLLLYYY helpfull! Thanks a lot man!!!

[AboveAverageBob]

This is an amazing visual explanation of the iron condor. I learned a lot. Thank you sir and congrats on the new baby!

[astriverofstrengthandknowledge]

This video made me realize for the first time in my entire experience trading options that it’s actually the bid price that gets your position filled almost immediately instead of the ask price.

[dupaacct]

at 5:23 in the video you said "were going to go ahead and select" and a radio button appeared. Since this seems to be necessary to do I cant follow on my app. Where is this select that allowed radio buttons to appear on your phone? When I hit the strike price the next screen shows up not staying on the same screen and the option you selected 5:43 and a green bar with SPY showing at the bottom

[reelhawksstudio]

The wheel still seems to present a better risk/reward ratio. It's also easier to close. If the stocks go down a lot you can always buy shares to lower your cost basis. If it goes too high you may have to wait a little for stock to come down. If not, you can move with another one and start selling puts to get a new wheel started. However, great content as usual: informative and entertaining!

[jl]

Great video! The visual step by step examples are what people need. Thank you.

[jnti]

The absolute best video on short iron condors. Appreciate it.!!

[ohh_mendozuhh]

Love the quality & style if your videos. Very thorough. Also love that you showed the contract at expiration for 100 % profit. I haven’t seen anyone else show it, so was curious.

[redbirdsjunkie]

At 3:16 your example showed buying a call/put 1 strike price higher/lower than your sold call/put
Beginning at 5:47 you then proceeded to buy a call/put 2 strike prices higher/lower than your sold call/put
Any particular reason why you went 2 strike prices higher/lower instead of 1 like the example? Thanks in advance.

[kakashisharigan]

Best video on iron condors I've watched

[AgWhatsUp]

Just wanna say that through trial and error and also through this and your many videos, I’ve been successfully trading iron condors with low risk strike prices for a monthly, not annual, 5% return on investment. Thank you for your videos, I know you’ve been out of the YouTube scene for a while now, but I hope you’ll start up again.

[expertcomputerhelp]

Alex, well done!!! Your best tutorial yet. I like the way you went through the entire live trade. Excellent. Thank you. 👍

[LaurinLight]

Very helpful video, especially the information on closing the trade. Thanks Alex!

[mendyedri]

Man I really like your content! Simply the best

[viralloger]

Safest option strategy ever. If ur not a millionaire doing this I don't know what to say

[wes]

This is all fine and good but which stocks are the best for this strat

[Benny_bandit]

Great video. I just started opening iron condor and I had a tough time understanding screen. This was a great breakdown. If you can do these with more spreads or call/ puts that would be greatly appreciated. Knowledge is power 💪🏾