Iron Condors ? how many should we have

Discussion in 'Options' started by silver217, Apr 19, 2011.

  1. Have you checked the correlation between RUT and NDX? Today NDX is up .36 while RUT is down 1.70. I haven't checked into it, and it's only one data point (could be the AAPL effect on the NDX today). Do you have any numbers?

    Almost everything seems highly correlated these days.
     
    #11     Apr 19, 2011
  2. stoic

    stoic

    With the Buy 930 CALLs, and Sell 920 CALLs.


    Your selling Iron Comdors. Short vs. Long.
     
    #12     Apr 19, 2011
  3. You might want to research that.
     
    #13     Apr 19, 2011
  4. I did not trade weeklies at first. After paper trading them for a while I saw little difference between the weekly and the last week of a monthly with respect to trading credit spreads.

    I have benefited several times by combining RUT with either the NDX or the SPX. One was overrun and the other was not.

    My reserve is calculated to accommodate having to bail on all the spreads allocated to the monthly buckets for one time frame. I trade fewer weeklies than monthlies. Bailing on a spread requires reserves. Bailing on an Iron Condor does not.

    I'm very interested in your insurance methodology if you would care to share it. Some use OTM PUTS in the same series, some in a farther out series. I'm still trying to add this method to my trading strategy.
     
    #14     Apr 19, 2011
  5. I think he meant "Iron Corndog". :cool:
     
    #15     Apr 19, 2011
  6. donnap

    donnap

    It's debatable. I side with stoic - net short premium = short condor.

    Probably the majority would say otherwise. I don't get that. You sell 2 credit spreads and it's a long condor. OK. Somebody screwed up the terminology and it stuck.
     
    #16     Apr 19, 2011
  7. MTE

    MTE

    While NDX and RUT, and SPX for that matter are highly correlated, they are not perfectly correlated so having positions in more than one index definitely has it's benefits.
     
    #17     Apr 19, 2011
  8. For one thing the OP is full of typos - two puts instead of calls, 930/920 reversed.

    As far why it's "long", probably because it has the same P/L and the long put or call condor.
     
    #18     Apr 19, 2011
  9. MTE

    MTE

    Add my vote to short iron condor. If my memory serves me right, we had a debate on this matter here a few years ago. It didn't get us anywhere though...
     
    #19     Apr 19, 2011
  10. rew

    rew

    I agree. After all, you're short the bear call spread, and you're short the bull put spread, so it seems peculiar to say that the combination of the two is long.
     
    #20     Apr 19, 2011