Iron Condor Spread Strategies: Book Review

Jared Woodard, my partner at Expiring Monthly, has produced an outstanding essay published in book format.

Iron Condor Spread Strategies: Timing, Structuring, and Managing Profitable Options Trades $8.99

It cuts to the heart of iron condor trading. With no wasted words, Woodard makes a significant contribution.

Iron Condor Spread Strategies by Jared Woodard

  • Don’t have a lot of time? – this book is short
  • Already know the basics? This book builds on what you already know
  • Want your trades to perform better? This information is valuable

From the introduction:

Iron condors have become popular, but there is little detailed or quantitative information about the best way to employ them. As participants in 2008’s crash and 2010’s bull market can attest, “set it and forget it” is not ideal. I’ll discuss when to enter a condor spread, introduce key structuring techniques and considerations, and present back-tested returns for selected strategy variations

Direct quotes

Instead of taking the approach (as I admit that I often do) that the iron condor is your trustworthy friend, Woodard lets you know that the trade is speculative in nature and that there must be a reason for initiating the trade:

Objective, statistically-significant indications that some asset is likely to be range-bound in the future, provide an excellent justification for a speculative condor trade.


Woodard issues an alert:

The characterization of iron condors or any other option spreads as “income-oriented” is misleading. A given iron condor trade will conclude with a net profit for the trader only if the thesis of the trade proves correct… In this respect, option spreads are no different from any other form of speculation.


I highly recommend this e-book.

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7 Responses to Iron Condor Spread Strategies: Book Review

  1. Dmitry 06/08/2011 at 7:01 AM #

    Looks like Woodard has also an other book: Options and the Volatility Risk Premium. Must be fun to read. So many books so little time..

    • Tyler Craig 06/08/2011 at 8:05 AM #

      Nice review Mark. I’ve got Jared’s book on my to read list.

      Dmitry,

      Jared’s other book is a fascinating read. I did a review on it a few months back – http://www.tylerstrading.com/options-volatility-risk-premium/

      • Mark D Wolfinger 06/08/2011 at 8:19 AM #

        Tyler,
        A lot of information packed into a neat package

      • Dmitry 06/08/2011 at 8:23 AM #

        Tyler: I actualy discovered that book at your blog 🙂

  2. Dmitry 06/09/2011 at 3:58 AM #

    Finished reading the book (well it`s really not a book – it`s an article), not much to say. Sample size used are too small to make any conclusions – 6 years = 72 trades if traded montly.

    Negative expectations for unmanaged positions.. well no one argues.
    Some better numbers with some “edges”.. again it`s obvious.

    Dynamic delta rehedging is nothing new.

    It`s not a book, nor an academic study, dissapointed. Surprised that someone dares to take money for such a work – the price doesnt reflect it`s value.

    Gonna try the second book(let) since anyways i already bought it.

    For comparison – just finished Mark`s book (The Rookie’s Guide, finaly found an electonic version) and found it quite valuable, compared to other books on options. I`d definetly recomend it to anyone interested in trading options.

    • Mark D Wolfinger 06/09/2011 at 7:47 AM #

      Dmitry,

      Thanks.

      Yes, the published finally offers an e-book version. The ridiculous part of the story is that they never told me. They just published it.

      What I liked about the book I reviewed is that it offers good advice that is not always mentioned. Agree that the data may be limited, but the idea of frequent delta-hedging is different. It’s not an idea with which I agree, but it does point out the idea (to adopt or reject) making adjustments much more frequently than most of make now.

      There is also emphasis on the fact that we cannot just open these iron condor trades and ‘expect’ to win. There has to be some edge. Perhaps it’s in ‘evidence’ that the stock will be range bound. Such evidence can come from technical analysis – for those who use it.

      For the low price I believe this essay in book format has some useful tidbits of information. On a $$ per word analysis, the book is costly. On a $$ per valuable idea, I find it to be a god deal. I’m sorry if I led you to a poor choice for you.

      Regards

  3. Dmitry 06/09/2011 at 1:52 PM #

    I have to mention that the other book, Options and the Volatility Risk Premium, gave me much more food for thinking.