There is one simple strategy to make money in this sort of
range-bound market. It's a strategy that beats both the bulls and
the bears time and time again, and it's called the 'Iron
Options traders have a huge advantage over other typical
stock-only investors because they can use strategies that
generate profits regardless of market direction. Simply stated,
iron condors, when properly structured, can even absorb fairly
large directional moves and still generate impressive
Over the last six months we've made the following profits
using iron condors:
… on 12/20/13
… on 11/15/13
… on 11/15/13
… on 8/16/13
… on 7/17/13
So what is an iron condor?
An iron condor
strategy is a non-directional options strategy that profits when
the option on the underlying stock or ETF of your choice expires
within your chosen range at expiration.
The basic premise of the strategy is easier to understand in
the chart below. But the key part, and the real advantage of this
You choose the price range of the trade. Increasing the
range will decrease your potential profits, but will increase
your likelihood of success.
Here is an example of a typical Iron Condor trade.
The blue lines define how far the S&P 500 (
) can move up/down before the position I am interested in
pursuing is in jeopardy of taking a loss. You can clearly see
that this range is from $195 and $177.
The underlying SPY is trading for $188.39 and I would like to
establish an iron condor for April expiration.
Here is the theoretical trade:
Sell to open SPY April 195 calls
Buy to open SPY April 197 calls
Sell to open SPY April 177 puts
Sell to open 175 April 175 puts for $0.28.
How did I select this trade…probabilities.
Call side of the Iron Condor:
Put side of the Iron Condor:
I wanted to choose an iron condor trade with a probability of
success around 85% which is why I sold the 195 calls and 177
Again, it's all about the probabilities when selling options.
The higher the probability of the trade the less premium you are
able to bring in, but I tend to side with the odds which is why I
typically choose a higher probability of success with each and
every trade I make.
So, with a range of 18 points (195-177) and SPY trading for
$188.39, the underlying ETF can move higher 3.5% or lower 6.0%
over the next 40 days before the trade is in jeopardy of taking a
The strategy will make
if it closes within the established range by April
When the market is going nowhere fast, the Iron Condor
provides safe returns that you can capture month after month.
Again, I use it myself.
My #1 Strategy for Earning 10% a Month!
FULL VIDEO REPLAY
of my latest webinar is now available! If you missed my latest
"Iron Condors 101."
I've posted a free video replay of my 60+ minute presentation.
Follow the link below to watch and you'll discover how you can
consistently earn 10% a month… even in flat markets… using
risk-controlled Iron Condor trades. You'll find out which indexes
are best for Iron Condors and how you should allocate your
portfolio to this strategy. And you'll receive free
action-specific trades you can execute immediately - for gains
you can earn in as little as 9 days!
Click here to watch this video replay now.