Iron Condor With NO Potential For Loss? - Options Trading Strategies - Neutral Options Strategies

Today we'll show you with live trades how we turned our original custom DIA naked put trade into a risk-free iron condor with NO possibility of losing money. Since we sold a call spread above the market and a naked put we were able to take in a credit of $1.33 overall and then used just $0.30 of that credit to buy protection as the market traded sideways.

The key here is that during all this the market did not move directionally that would have helped this position. Rather selling options and time decay proved to be the most beneficial strategy here.

[bluenetmarketing]

How often does it work out that you can have zero risk where the credit covers the spread?

[TotalClarity]

I wonder how many people look at the P/L Open numbers on these vids. For this one at 4:54 min if you add up what's visible they have a net loss of ($23) for all trades combined and this DOES NOT include commissions. I like the information presented but the results for all visible trades leaves me wondering about their true capabilities. Results matter folks!

[digitaldood]

Awesome video! Love the no-risk upside initially. Do you hold these to expiration or is there any assignment risk that you have to watch out for? Also, what kind of margin is required for the initial position?
Thanks!

[jajousernametaken]

Hi Kirk
My question is how did you decide at the first place to sell a naked put with the call credit spread? Setting up the spread you assume ("bet") that the market goes *down*. Selling the put you assume ("bet") that the market goes slightly up or stays where it is. Protection would be *buying* the put and not selling. Or to ask similarly: what happens if your first assumption is correct and the market goes down? You can't open the put credit spread and your naked put loses $$ as fast (??) as your call spread wins.

[mathewthomas]

Well, I wouldn't say you have no risk on this trade. You just removed your initial risk... then after doing that, your new risk is giving back your pretty large profit that you already had (which is still risk). Your 1 point wide Iron Condor was trading around .18 (.665-.485) when recording this video so your risk is giving up the .82 on the trade.

But either way, great strategy to synthetically take some profits while still leaving the position on. I like to do this with Broken Wing Butterflies!

[peterhigbie]

Was that hard to find? and can you do it over and over?

[sudarshandujari]

Conceptually fine but practically not sure how many of us will find a trade like that

[lexredom]

In order to buy a put at $0.30 to stock has to be higher or vol has to drop a lot.  
If neither conditions happens, and stock go down, how do you protect the position now, because the put will be very high at that point? Thanks. 

[bkrharold]

I like your risk management techniques, but you never mention commisions TD Ameritrade charges $9.99 plus $0.75 per contract. This changes the risk/reward calculation. In this trade the $.30 we paid for the long put would have covered the commisions. Wouldn't it be cheaper to put a GTC order on the naked put?

[YodelersAnonymous]

This is great video and my question is about the naked put you sold.... means the put is not cash secured nor did you buy another put against that put.... so using margin you first do the credit spread then sold the naked put... ideally hoping the value of the stock stays below your credit spread but not too far below your the strike of your short naked put??

[Kurtie]

Thank you Very much! Clear and good. I'll be viewing many more of your videos to learn more about trading strategies.... Fantastic.

[silicium]

Hi, Kirk. I just dropped by your channel and watched several your videos. I trade chinese equities market for now. But i wonder did you ever throw a webinar on option stragidies ? I like your specific trade style and would like to see your overall comprehension on this security. Good luck

[jonway]

It is an awesome video.
What if at expiration, the price closed at $179.5, do we risk getting assigned or we just make $1.03-$0.5?

[gaving]

Awesome video Kirk, thank you for helping the investing world out there. Can you tell me how you calculate margin costs? thanks. How much did it cost you for this one?