I Loved Iron Condors Until...

By Johnny M Junior

Hi everybody and welcome to San Jose Options. In this demonstration we will be discussing the dangers of Iron Condors. The Condor is an excellent income strategy, but there are ways to do it correctly and ways not to do it. The purpose of this article is to make every option trader aware of the risks that are involved in trading option spreads if you do not know what you are doing. In particular, trading iron condors close to expiration is very high risk and can lead to catastrophic losses to your trading capital.

If you have a few minutes, I would recommend watching the video that we have included with this article. You will see an Iron Condor on the SPY which demonstrates the type of Iron Condor that can wipe out your entire trading capital.

This is the strategy that is taught by 99% of the courses on the Internet. Don't be misled, and don't fall into the trap. Take a look at this video and see firsthand the stress and the risk involved with this option strategy.

Be Warned about the Iron Condor

As this option trade nears expiration it becomes more and more risky. The Delta on the position can change extremely fast because the Gamma is extremely high. This means that the trade is outrageously volatile as it gets closer to expiration, and again, if you are near the short strike just a few days before expiration date, then you will be extremely stressed because you will be in a horrible situation. Please watch the video at the 6 minute mark to see what I am talking about.

Well, to wrap things up, I would like to say thank you for reading this article and watching the video that goes along with it. I hope you have learned some of the things about the risky Iron Condor. Now don't get me wrong. The Condor is not a bad strategy. The problem that I see is that most people trade this option spread too close to expiration, and this is a serious problem. There is a much better way to trade this strategy. If you would like to learn how to do it safely, then I highly recommend that you visit San Jose Options because they teach the best Iron Condor that I have ever seen. - 31970

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