A Conversation With An Iron Condor Trader

I had an interesting conversation with an option trader today who is still searching for the secret to making consistent returns with option trading. He said many things that I absolutely agreed with.

Be Warned about the Iron Condor

One thing that got my attention was when he said “Non-directional option trading doesn’t mean we can make money in any direction. It means that we make money if the underlying doesn’t move in any direction. In other words, it’s still a directional trade, sideways.” He was right, and it’s often advertised that it’s easy to make money with options because we can make money on any direction. However, this isn’t always the case.

When trading Iron Condors, especially if you are trading the type of Condors that most books and courses teach, you understand what I am talking about. By trading with this strategy in 2009, it is reasonable to assume that you are not making anything. The reason for this is that the Iron Condor is directional when it comes to option trading, yet that direction is sideways. With a sideways move, it is just as difficult to predict as a move which occurs up or down.

Over the years I have received several calls from people who ended up having large chunks taken out of their accounts because of trading credit spreads and condors. The story is always the same… “For several months everything was going great when suddenly I nearly lost my entire account in one day.” I have heard this over and over.

This is precisely why I don’t trade the popular Condors and Credit Spreads. If you’re a few days from expiration, and the RUT is right at your short strike, then you are trading the way most people trade this strategy, and soon you’ll be telling the same story to your best friend, and even hiding the truth from your wife! You chuckle now, but you won’t think it’s funny once it happens to you. The worst part of this style of trading is the high stress level that could really ruin your life.

San Jose Options Mentoring has redesigned Iron Condors and Credit Spreads in order to combat this problem. To help me keep a lower stress level as well as to avoid any dangerous situations, they have taught me how to use different techniques so that I am able to give the underlying more wiggle room. In most cases, the less adjusting you have to do to your condor the better off you will be.

They’ve also developed techniques to lock-in our profits on Condors. Most option traders exit their trades after they make a profit, but I learned how to lock-in our profits and stay in the trade a little longer.

In the end, if I ever have a Condor move against me, then I have developed a technique to keep me in the game by making adjustments and morphing into a new position! I may run into a bad month once in a while, but I’ll get an excellent, free trade from it where most traders bite the bullet and move on.

In the end, win or lose, I have developed an impressive way to trade Iron Condors along with other strategies.

Trade Low-Risk Option Strategies, not your livelihood. Learn how to trade the Iron Condor with San Jose Options. Don’t be an ordinary option trader!