Archive for July, 2010
The Dark Side of Iron Condors
One of the many strategies which intrigue beginning options traders is the Iron Condor. The term itself sounds exotic, and begs you to research the strategy a bit more. I must admit that upon hearing this term used for the first time, I was more than a bit curious.
On the surface, the strategy is very sound: Taking a neutral position on the security, earning premium upfront, and allowing the time decay to make you money! However, there is a dark side to this trading strategy that most practitioners usually do not speak about, but can be disastrous to novice and experienced traders alike…
First, for the 2 option traders on the planet who have no clue as to what an Iron Condor is, let me try to shock some life into you:
An Iron Condor
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