Iron Condor Trading Simulator

Assume that on december 1 xyz company is trading at 50.

Iron condor trading simulator.

Iron condor utilizes two vertical spreads a put spread and a call spread. Take a security that is trading at 45. A long iron condor is essentially selling both sides of the underlying instrument by simultaneously shorting the same number of calls and puts then covering each position with the purchase of further out of the money call s and. This could be done by purchasing one january 40 put with a 0 50 premium at a cost of 50 0 50 premium times 100 shares controlled by the one contract.

Maximum risk is limited. An iron condor spread is constructed by selling one call spread and one put spread same expiration day on the same underlying instrument. All four options are typically out of the money. This page explains iron condor profit or loss at expiration and the calculation of its maximum profit maximum loss break even points and risk reward ratio.

This is the core of the iron condor position. Of an underlying asset. Iron condor calculator shows projected profit and loss over time. Iron condor basic characteristics.

An iron condor is typically a neutral strategy and profits the most when the underlying asset doesn t move much. You are given repeated trades using historical data and learn how to manage exit and adjust every trade until you get it right every time. Although the strategy can be constructed with a bullish or bearish bias. An iron condor is a four legged strategy that provides a profit plateau between the two inner legs.

The iron condor is a limited risk option trading strategy that is designed to earn a small limited profit. Iron condor is a non directional short volatility strategy with limited risk and limited profit potential it got its name from the shape of its payoff diagram which resembles a condor with wide wingspan. The iron condor 101 trading simulator aka the iron condor training game is a fantastic way to do this. The trader sells a put at a 40 strike price and a call at a 50 strike price.

To construct an iron condor a trader would initiate a multi leg options strategy. You can think of this strategy as simultaneously running an out of the money short put spread and an out of the money short call spread some investors consider this to be a more attractive strategy than a long condor spread with calls or puts because you receive a net credit into your account right off the bat. A put vertical spread involves buying and selling of equal quantities of puts of same expiration but different strikes.