Weekly Returns of up to 100% using Broken Wing Put Condors 1-3-2
VloĆŸit
- Äas pĆidĂĄn 2. 08. 2024
- Broken Wing Put Condor 1-3-2 is an amazing weekly trade that has limited risk and massive potential. Today I breakdown how I enter the trade in IBKR and record it in my rolling options record keeper. Using limited loss options strategies is one of the fastest ways to make massive weekly returns by trading options.
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⏠Discount to Seeking Alpha Only $99/annually âŹâŹâŹâŹâŹâŹâŹâŹâŹ
âșwww.sahg6dtr.com/2RSPJ5/R74QP/
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This trade is a variation of the Broken Wing Butterfly BWB 1-3-2 and is a great setup for short duration options.
⏠CONTENTS âŹâŹâŹâŹâŹâŹâŹâŹâŹâŹ
0:00 Intro: #drawbridge100k Review This week's results
1:35 Live Trade Notifications
1:58 Iron Condor VS Put Iron Condor
3:21 Broken Wing Put Condor 1-3-2
4:00 Reading a Trade Alert on Discord
5:35 Setting up the Put Condor in IBKR
6:30 How the trade makes money
7:11 Calculating Max Profit/Max Loss
8:10 Entering the trade in the Rolling Options Record Keeper
9:55 How much did I make?
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My primary investment strategy is long term high yield dividend investing, index funds and reducing risk and exposure using options. I have been actively trading the stock market for over 25 years and have built most of my wealth by reinvesting my dividends and following my 14 Personal Rules of investing. I actively trade options on both the American and Canadian Stock exchanges using options strategies and buying and holding high yield dividend paying stocks.
I generate monthly income in two ways. Averaging more than an annual 7% return by collecting dividends on high yield dividend stocks that I hold. The second income stream comes from the selling of option premium and taking advantage of theta decay. I love trading strangles, Iron condors and diagonal spread for maximizing returns. Delta neutral strategies allows me to make money in both bull and bear markets and limits my risk. Both of these strategies are suitable for passive income and create a stable predictable safe passive monthly income.
Want to learn how to trade stocks and make more money? This channel is dedicated to increasing investment returns and building wealth by passively trading in the stock market. If youâre tired of poor performance then make sure you subscribe to Drawbridge Finance czcams.com/users/Drawbridgef... I produce weekly videos for the beginner trader and use simple explanations to learn how I buy and sell stocks for profit.
Letâs Get Rich Together
Levi Woods
Disclaimer: I am not a financial planner and am not offering investment advice. This is an opinion channel only and should not be taken as any form of financial advice. I receive a small commission from the purchase of any item from using the links listed above. There are financial risks involved in taking on any monetary transaction that I discuss in my videos.
#investing #stockmarket #dividends #LetsGetRichTogether
đ° Join the discord chat: www.patreon.com/drawbridgefinance
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Greatly appreciate the breadown and walkthrough of your trades! This video and the "How to sell put options for monthly income" where you broke down the etsy trades- thanks so much Levi! Looking forward to your weekly Tuesday Live session tomorrow.
Thanks Ashley!!
Great explanation! That helped me understand these trades a little closer.
Glad you enjoyed it Don!
Thank you for the information of BWIC. It much information on CZcams about this option strategy. I just wish you show more clearly how to choose the strikes and why. Anyway I appreciate sharing your knowledge
More to come!
Wow. Thanks Levi. I like a lot this strategy. Do you always use it short term or it could also work for the regular 30-45 DTE trades?
I like this strategy on 15-0 DTE but it can be setup for longer.
Greta vĂdeo and awesome spreadsheet. Did you build it yourself?
On another note, I wanted to ask you how you manage such a trade in case it goes against you. Thanks.
Thanks. Closing early is the best choice if an underlying moves against this trade setup. The spreadsheet I built really helped improve my trading. Itâs available for purchase on my website www.drawbridgefinance.ca but the cheapest way to get it is to become an optionâs tier patron for a month. Not only do you get the spreadsheet, but also access to the discord chat room for the month as well. www.patreon.com/drawbridgefinance
Great setup. I trade in TOS and Tastyworks, and neither will allow me to assemble more than 4 legs for a trade. Thought or ideas ?
Every leg is a separate entity anyhow. Entering the trade in multiple transactions achieves the same results.
Thanks Levi. Where can I find the cumulative results for the 100k challenge? Iâm not seeing them inside patreon or discord.
Iâll post them Monday on discord when Iâm back online. Enjoy the rest of your weekend Denis.
Greatly appreciate Levi. Unfortunately my broker (IB) does not allow me to place a trade like that because it has 5 legs and they say it's not allowed.
It can be placed as two trades. Profit loss chart is the same.
Whoa I just noticed your cool sword collection in the background. Can you show them off in a video?
Sure
Wonderful job! Do you have something related with Bitcoin Options on Deribit?
Not yet!
i really canÂŽt find a situation in which risk/reward is 1:1 and enter with credit.
i do understan that if the selling put finish OTM you collect the premium, but what happen to the BUY PUT, i still dont get it, if the BUY stays ITM you have to close before expiring ( to not guet assigned ) or...???? by the way, grat video!!!
I close all of the options before expiration. If the long put is in the money then I get paid a credit to close that put. On these trades there is assignment risk on the short options and they are usually close enough to at the money that I want to close them to eliminate after hours risk.
Hi Levi,
The option exchanges won't allow more than four legs so how are you able to place this 5-leg trade? (10/6/22)
These usually only 4 different strikes so most brokerages allow entry and exit in a single trade. Brokerages like thinkorswim and INteractive brokers can have up to 6 strikes per trade. If a brokerage doesnât allow the trade it can be entered in multiple small trades for the same results.
@@DrawbridgeFinance max number of strikes in the TOS platform as a CUSTOM trade is 4 not 6.
You can set this up in 2 trades with 1 trade in 4 legs & the second in 2 legs as he said or you can also get a similar profit profile with just 4 (legs) puts by increasing the delta between the strikes on the lower pair of puts.
In this example you could
buy 1 - 140
sell 1 - 139
sell 1 - 137
buy 1 - 134
This is without checking, so you may have to play with the strikes, but this is the concept to get a similar profile in 4 legs.
The spread between the 2 sold strikes adusts the width of the max profit.
The larger spread on one pair of wing strikes acts to pull cost from the other wing.
(You could do this with calls as well. You could flip this stategy over and set up before ex-div dates when put premiums include the dividend to be paid. Warning, do not do this with ITM short calls or short iron condors around ex-div dates.)
This would also reduce commissions. On one contract that's insignificant,.... but if you leverage and do trades involving 50 to 100 contracts or more (with less risk and therefore lower returns) commissions can be several hundred dollars even if it's just $0.65/contract as it is on Fidelity.
Robinhood doesn't charge commissions. But your trades get telegraphed to the big boys. Although if you use limit orders, I'm not sure the algos seeing your order is a problem.
You should also check when setting this trade up to make sure that a simple bull put spread or a bull call spread with just two legs doesn't provide a similar if not better risk reward profile.
Just my 2 cents.
â@@DrawbridgeFinanceI'm with Interactive Brokers and they refused that type of trade because it's more than 4 legs.
What are you trading on? How can I customize spreads?
This can be traded on many different underlyings. If youâre interested in seeing my specific trades you can sign up to be an options tier patron: Join the community in real-time chat: www.patreon.com/drawbridgefinance
Any defense/adjustment plan if the trade goes against you?
If it gets tested heavily and I donât think it will come back into range in time I just close early. Limited loss strategies with shorter durations are hard to defend once tested.
@@DrawbridgeFinance Just trying to understand as i am just learning about spreads> So with the trade you did< you just close early if the the price moves against you otherwise you let expire?
@@lovellesg6790 if it goes against me I close early. If it stays in range I hold.
Thank you for this great video., I am just concerned by the commissions because you have 6 legs ad if you close early you can have a maximent of 2 X 6 = 12 commissons to pay , in my case it is around $12, which limit seriously the profit ....
Commission fees do add up. Condors are limited loss so they can be held to expiration.
Man I am bummed. I canât do this trade in TOS
Every option is technically a separate trade. Entering parts that Equal the whole end up with the same results.
@@DrawbridgeFinance what do you mean exactly. Take them individually?
@@moolababy enter this trade in 2 pieces, in TOS enter an IC first with 4 strikes and then separately enter part 2 of this trade as a spread. Both combined will give you the 2, 3 and 1 ratio that he says on this video.
Are you still doing this?
Yes. I run a version of this weekly although I almost always do it as a 1-1-3-3 trade. The setup has a better return in bull markets.
@@DrawbridgeFinance Thanks i see soon in your patroen
lol love the videos but did you say "Qual i com?" Sorry man its pronounced Qual Com
Thanks.
Qual, I cum
Do you leg out of this trade or close it all at once when youâre happy with the return. Can you close early?
Itâs managed based on price action if it moves into the loss zone I usually close early. I typically hold as close to expiration as possible.
Thank you for this. I was wondering,
What were your math skills before starting options?
It takes me a minute to see what youâre seeing and I havenât gotten used to the numbers yet. Im sure itâll get easier with more practice but yeah. Impressive you built those spreadsheets.
Once I know what Iâm doing Iâll probably be looking to purchase đđ«
I have been in love with math from a young age. In high school I competed in provincial and national competitions and ranked in the top 2% in Canada in my age group. I took calculus for fun in university because I didnât have to study it so I would say that my math skills are probably higher than many. All that said. Options trading is pretty basic addition and multiplication and the math is not the difficult component of trading. Complex option trading setups allow for a great deal of tweaking that suit my individual assumption. My options spreadsheet helps layout some of those strategies visually which is far easier and there is almost no math involved.