iron condor on sp500 futures option help

Discussion in 'Options' started by newguy05, Feb 21, 2008.

  1. Fine. I am assuming that you are aware that the probability (based on deltas) that your short strike would be visited is 20% (not 10%). This means that you should expect that your short strike be touched 1 out 5 times.

    I would also add that I would play this as follows:

    1. If things go as planned you will make your buck.
    2. If they do, then this would mean the market tanked. The position should be long vega, and therefore depending on time left may gain because of rising volatility.
    3. Is the market goes down fast and never gets to your position, you can roll it to a negative vega position: the condor. Therefore you do not roll to same type of position but to another type.

    What do you think?
     
    #21     Feb 26, 2008