In a Nutshell

Our strategy is actually pretty simple:

1. Sell a few iron condors each month,
2. take the profits from that sale, and
3. sit tight until the end of the month.

That’s it, really. This is a strategy that market makers and professional floor traders rely on every day to generate profits and protect themselves from risk. We use the same strategy that they do, and we generate the same returns that those professionals do. Now, you can get as technical and complex in your analysis of iron condors as you want to, but if you’re like us, then you probably like the idea of a trade that doesn’t take more than 5-10 minutes a week to manage properly.

That’s right, you can trade iron condors with just 10 minutes a week.

Risk management

We emphasize risk management and position sizing, and we can’t say it enough: never take on more risk than you can handle, and never initiate a trade if you don’t know how much risk you’re taking on. This doesn’t mean we’re risk averse - not at all! - but it does mean we’re risk aware. We know that risk management and position sizing aren’t sexy or fun, but those techniques keep traders alive and in the game. Subscribers to our site are advised to define, in advance, what approach they will take to our trades. Two possible examples:

Aggressive Approach
Sell a number of iron condor spreads every month corresponding to a predetermined percentage of available margin. As capital increases, adjust size and number of spreads accordingly.

Conservative Approach
Sell spreads corresponding to a much smaller percentage of available margin, and deposit an equal amount of margin in a high-yield account or bond fund. As capital increases, divert profits to the risk-free account in order to protect gains.

Only you can determine your own risk profile.

The Iron Condor

We’ve written a series of posts describing our strategy in greater detail, and new members in particular should read them through in order to understand the meaning and thinking behind our trade alerts:

• What is an Iron Condor?
• Iron Condor Trading Rules
• Why Delta Matters
• Asset Allocation is Extremely Important
• Why Adjusting Iron Condors Can Be Dangerous
• Trading, Overtrading, and Waiting
• The Best Time to Trade Iron Condors, Part 1: Volatility is Your Friend
• The Best Time to Trade Iron Condors, Part 2: Ignore the Trend
• A Rough Formula for Calculating the Success Odds of Your Iron Condor
• Relax, Don’t Do It (Trading Options Near Expiration)
• Hard Stops?
• Liquidity
• 8 Hedging Ideas for Iron Condors, Part 1
• 8 Hedging Ideas for Iron Condors, Part 2 (members only)

Also, be sure to check out the information on iron condors available in our sidebar links, and as always, please get in touch if you have any questions.