Iron Condors wiped out my Savings

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Hi all and welcome to this article by San Jose Options Mentoring. The purpose of this instructional writing is to warn beginning and intermediate option traders about the risks involved in trading Iron Condors. Although Iron Condors can produce monthly income, they can also produce catastrophic losses to your trading account if you do not trade them correctly. Now, unfortunately most books and most option courses that teach how to trade the Iron Condor, push that the Iron Condor should be traded near expiration. This strategy will work for a few months in a row, but then when the market wants to wake up, the trader using this option strategy will also wake up to find most of his trading capital gone.

In this article you’ll find an embedded video. This video is a good demonstration of how NOT to trade Iron Condors.

On You Tube there are many option traders teaching others how to trade this strategy, but be very careful because most of these instructors are not pointing out the risk in their short videos on the Internet. In this particular video you can see how SPY does not have very much wiggle room, and I should also point out that the trade does not have very much time either. This means that if SPY moves near the short strike as expiration is approaching, this option trade will become extremely dangerous. The person managing this trade will not be able to sleep at night and won’t be able to relax during the day. They will be risking a huge loss to make a very small return, and it just might come down to the very last day before he knows if it’s payday or doomsday. [youtube:VE4AF6hf9Q8;Be Warned about the [link:Iron Condor];http://www.youtube.com/watch?v=VE4AF6hf9Q8&feature=related]

As this option spread gets closer to expiration it becomes more volatile and more risky. Even though the trade might be yielding a profit, the option trader can lose all of the profit and more in one single day. This is because of the option Greeks. The Gamma is extremely high which causes the Delta position to change in an uncontrollable manner. Please watch the video at the six-minute mark to understand better what I am talking about.

To wind things down, I hope you have learned some new things about the Iron Condor. I hope you can see that it can make money, but it can also be very risky. Trading Condors into expiration can be very stressful. If you are interested in learning a better way to trade this option spread, then I highly recommend San Jose Options mentoring program. They have developed the best Iron Condor that I have ever seen. You won’t regret giving them a visit.

Learn the Secrets to Trading the Iron Condor at San Jose Options Trading and Mentoring.

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