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Strategies for
Condors and

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Quick Review: Condors and Calendars

General Rules

Trade Setup, Entries, Exits and Adjustments

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Iron Condor

Long Call
Bear Call Spread
Short Call
Sell in same expiration month

Short Put
Bull Put Spread
Long Put

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Double Calendar

Call Calendar
Near Month Far Month

Short Call Long Call

Put Calendar

Short Put Long Put

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Iron Condor Entry

Sell in typically mid to high volatility environments

Sell on a day when VIX rises
Short option delta plus or minus 10
Long options purchased one to two strikes from short options
Position Delta close to zero
GLD Iron Condor 4/23/10
Iron Condor Risk Graph
GLD Chart

Resistance at $114

Support at $106
Trendline support and moving
Average support

Volume divergence
GLD EFT 4/27/10

Break above resistance

*At break of resistance adjust to positive or neutral delta

* Set stops to sell ITM positions if support is broken
Must react at +25 or -25 deltas
Must close or roll at +35 or -35 Deltas

Typical adjustments (Simple and inexpensive)

*Close Trade
*Roll out and widen spreads

Defend the trade (More complicated and expensive)

*Buy OTM back month options to cut position delta by
*Buy ATM debit spread Straddle
*Buy ITM options (>80 delta) to cut position delta by
100% or more
*Minimal Theta loss if ITM options are >80 delta
*Use the 5 or 8 day SMA as a guide
Condor Adjustment w/ITM options
Risk Graph after adjustment
Double Calendar

Use in Low volatility market or stocks at IV lows

Look for minimal IV skew from front to back month
Buy Call and Put calendars OTM
Enter with profit potential anywhere between strikes
Campaign calendar increases adjustment options
GLD Double Calendar 4/23/10

Gld at Fridays close. Delta -69

Campaign calendar due to low volatility
Double Calendar Risk Graph
Double Calendar Adjustments

Adjustments can begin when there is a break above or

below the 5 or 8 day moving average or when price hits the
Tent Pole
Add/remove calendars
Add ITM calls or Puts as in Condor section
Buy and sell long/short options for delta change
Adjust to delta neutral or better based upon trend
Added Calendar Adjustment
Risk Graph of Calendar Adjusment
Gold Calendar Adjustment 4/27/10
Risk Graph Adjustment
Adjustment if GLD continues to Rise
Adjustment Risk Graph

Notice increased profit potential of the trade

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