Review of The Complete Beginner's Guide To Managing Losing Iron Condors

 Link:  The Complete Beginner's Guide To Managing Losing Iron Condors - YouTube


Trade setup:

  • DTE:  More than 21 days
  • Strikes:  16 deltas on both sides for short options.  5 deltas on both sides for long options.
  • Algorithm
    • Do nothing before 21 days to expiration
    • At 21 DTE, If ITM, do nothing by default because there are many trades going on.  Take the loss because there are so many other trades going on.
    • Or, try to roll the entire condor for a credit without changing strikes.
    • Or, close out untested side and roll out tested side if you can get a credit.
    • Or, roll down and out the untested side and roll out the tested side for a credit.

Commentary:  In none of these strategies does the author roll down the tested side.  He is buying time for the tested side and trying to collect profit on the way.  He also does not have a stop loss besides the long puts.

Takeaways:  

  • Not sure if this is what I am looking for.  The overall alternatives for handling ITM is pretty straightforward.
  • Taking max loss is pretty laissez faire.  Can you make money doing that?  Typically, the expected loss is negative in iron condors - all trades - if you let them run, so this does not make sense.
  • The concept of a "skewed iron condor" (0:46) is interesting, perhaps.  Have a larger spread on the put side than the call side.  "The perceived risk by the market is to the down side."  Standard iron condor is $10 wide on each side.

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