«3 reasons why they make money.»
Coach Tyler here.
We’re putting the finishing touches on Monday’s YouTube webinar on the mighty Iron Condor strategy. To prepare you, let’s review three reasons why condors on Indexes make money over time.
① First: Options are overpriced due to investors’ willingness to overpay for insurance. There’s a persistent gap between how much movement options are pricing in (e.g., implied volatility) and how much the market actually moves (e.g., historical volatility). That gap is where the condor’s edge lies.
② Second: You profit from the passage of time. This dynamic is nice because it means you don’t have to guess the direction of the market’s next move. Sidestepping directional betting is a welcome change to those who find forecasting movement to be harder than they thought.
③ Third: The market’s natural mean-reverting tendencies work to the advantage of the iron condor. Prices are like rubber bands. When stretched too far in one direction, they have a tendency to come back – especially on Indexes. This rangebound action keeps prices in the condor’s profit range. We’ll be highlighting how to properly build condors on Indexes in Monday’s class. Join us!
🛑 Upcoming Options 101 Webinar: Iron Condor for Beginners with Coach Tyler Craig | March 28th, 2022 at 8:30 PM EST on YouTube
Join Coach Tyler Craig as he teaches everything you need to know to get started with trading Iron Condors for monthly cash flow. As the architect of Tackle Trading’s Cash Flow Condors system, Tyler brings a wealth of knowledge on the topic and will break down this popular strategy in simple, easy-to-understand terms.
In this webinar you will learn:
✅ What is an Iron Condor
✅ How to Build an Iron Condor
✅ Why Iron Condors Make Money
✅ Best Practices for Trade Management
✅ The Ideal Stock to Use
Video of the Day: How to Build an Iron Condor (Using the Tackle Theta Spreadsheet)
Coaches Tim, Noah, and Cody teach students how to build out an Iron Condor using the Tackle Trading Options spreadsheet.
▶ You can find the Options Spreadsheet here.
Chart of the Day: Sizzling Semiconductors ($SMH)
Semiconductors took flight Thursday with the likes of NVDA, AMD, AVGO, and INTC rocketing to the moon. This is yet another sign of the market’s improving health. Chip stocks don’t run unless risk appetite is on the rise.
Options Theory: How to use ThinkorSwim Analyze Tab
Today’s video walks through how to use the risk graph and other features of ThinkorSwim’s Analyze tab. I also go through how to model your entire portfolio.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cash Flow Club Replay
If you missed last night’s episode when Coach Gino Poore talked about Finding Value Stocks with increasing Value for Covered calls or would like to watch it again, check it out here.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
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