Jared Woodard, my partner at Expiring Monthly, has produced an outstanding essay published in book format.
It cuts to the heart of iron condor trading. With no wasted words, Woodard makes a significant contribution.
- 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
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.