Understanding Iron Condor Risk: How Duration Impacts Your Trade
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- Äas pĆidĂĄn 26. 06. 2024
- In this video, we dive deep into the mathematical nuances of trading iron condors and how the risk profile evolves over time. An iron condor is a popular options strategy involving four different strikes, designed to profit from low volatility in the underlying asset. As time progresses, the risk exposure of an iron condor changes significantly, influenced by factors such as theta decay and changes in implied volatility.
We'll explore:
Overview of Iron Condor Strategy: A brief introduction to what an iron condor is and its basic construction.
Impact of Time Decay (Theta): How theta decay affects the profitability and risk management of an iron condor over the trade duration.
Volatility Changes: The role of implied volatility shifts in altering the risk landscape of your iron condor.
Risk Management Techniques: Strategies to mitigate risk as your iron condor trade matures.
Whether you're new to options trading or looking to refine your strategies, understanding these dynamics will empower you to make informed decisions throughout the lifespan of your iron condor trades.
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0:00 The math behind how much I can make vs how much I'm risking.
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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 / drawbridgef. . I produce weekly videos for the beginner trader and use simple explanations to learn how I buy and sell stocks for profit.
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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.
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