Option Spread
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<< Credit Spread Option Option Spread Trading >>An option spread that has gained a lot of attention and popularity over the last couple of years is the iron condor spread.
As option trading has become more and more accessible to the ‘retail trader’ so has the resources and education necessary to make what some might call more complex option spread strategies achievable. Option spread strategies like the iron condor spread, the calendar, the credit spread, the butterfly spread, and so on were quite likely little heard of just a few years ago.
However now, it is extremely easy to find information regarding these option strategies as well as many others. Late night television features programming and the investment and / or finance section of your local bookstore is full of these publications.
Perhaps one of the draws of this type of investing for the retail crowd is the leverage which option spread trading allows – as well as the number of available option strategies that can be put on and benefit with very little time involved watching the market and without having to pick market direction.
In particular, the iron condor option spread – along with the credit spread (which is what the iron condor is constructed from) is one which is quite easy for the novice option trader to understand. I think it could be safe to say that the option strategy progression many if not most new option traders make goes as follows:
Start off by trading either Covered calls or perhaps straight calls and puts, then they progress on to debit spreads, then credit spreads. Right in here a few of the more adventuresome might take a detour and try naked put and / or call selling – until they get burned and retreat back to credit spreads. Then iron condors before moving on to the butterfly spread, double diagonal, and more.
Related Iron Condor Info:
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