Options trading strategy: Iron Condor
Iron condor is similar to Iron butterfly. In the case of Iron Condor we will be selling OTM (Out of the money options), it means we will get comparatively less net credit (because OTM options attracts less premium compared to ATM options) which will in turn get us limited profit. The loss will be also significantly higher side. The main attraction of Iron condor that probability of profit is higher than Iron butterfly
Construction:
Buy one out-of-the-money put with a strike price below the current price.
Sell one out-of-the-money put with a strike price closer to the current price.
Sell one out-of-the-money call having a strike price above the current price.
Buy one out-of-the-money call with a strike price further above the current price.
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