Options Selling
One of the most fashionable options selling strategies of non directional trading investors is the iron condor strategy.
The iron condor spread is a theta positive option strategy option traders use when they feel the underlying being used will stay within a range on the price chart over the next however many days are left until expiration day.
Iron condors are actualy two credit spreads – a call vertical spread above the current price – and a put vertical spread below the current price.
As long as these trades are placed correctly and the underlying being used doesn’t swing around too wildly during the duration of the trade (usually iron condor traders use time frames between 30 days and 90 days with the majority of them using shorter time frames) the trader can expect to win with these trades a majority of the time.
Iron Condors are attractive to option spread traders because they provide good probabilities of winning and they can be a very hands off trade requiring little time actually ‘trading’.
photo credit: trader_john
