Income Options Spreads

The "Iron Condor" is a negative Vega option spread

, meaning that it benefits when the IV on the underlying traded is going down. This usually happens if the underlying price is rising. Right now the market is somewhat bullish. With a negative Vega spread this could be the right time to use the "Iron Condor" strategy, but make sure that the IV still has room to drop. If IV hits support, then watch out because it might just rise on you and this will really hurt the Condor.

Since the "Iron Condor" is a negative Vega strategy, this should be the right time to use this income option spread (when we wrote this article the volatility in the market was dropping). Today's market has made it a pretty decent time to manage this option spread now that the volatility has been moving downward, and the markets have become a calmer place to be. Because of this mellow market many of the income traders have been making money with the stock market over the last few months.

When the stock market gives us this opportunity, it is a wonderful thing! It is like living a dream! Wouldn't you enjoy it if you could make some money while you were reading a good book, swimming, hiking, golfing or enjoying your favorite cocktail? With the "Iron Condor" you can make money almost each day at times. It is wonderful when the stock market is just right to give us this opportunity.

Now that I have studied with San Jose Options I learned a conservative yet very rewarding way to trade the "Iron Condor" spread. It is a much lower risk and a safer way to trade the "Iron Condor." What I learned before and what the other courses had me doing was very high risk. I didn't realize all the risk I was taking on until I studied with San Jose Options and learned the difference. Now I can trade "Iron Condors" with much more confidence knowing that my money is safer than it has ever been before.

With this new way of conservative trading I have been making an easy 10% for the last few months and believe me, I haven't had to make many changes at all in my trades. I have been able to put the trade on and walk away letting the trade and my money work for me. Before, with the more aggressive way I was trading this option spread, I was making several adjustments each week. With this new trading technique not one single time has the market ever hit my adjustment point. Let me tell you, I am really enjoying the stock market and my trading now.

by: Johnny M Junior

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