Where would you put stops here?

@@FC2ESWS stops can be tougher with options than equities, they're better off done as mental stops so you don't get taken out during low liquidity (which for anything but maybe SPY and QQQ options is going to invariably be true in the 1st and final half hour). But as an easy rule of thumb, for options strategies with a high win rate, you make your stop loss equal to your stop gain. If you can have a 20% win 80% of the time, and stop out for a 20% loss 20% of the time, then you net a 20% win 60% of the time. However, you have to look at the volatility of your particular strategy to see if the trade has stable enough short-term pricing to make sure you aren't just being constantly whipsawed out of the trade. Also the opening gap can blow away your ability to stay within an intended stop. Tasty has done some historical backtesting of iron condors, for example, where their results suggested just eating the max loss because it was so infrequent. Not financial advice, just providing context.

How come? All trades have max loss fixed, which is below the 10k. Please enlighten us with your calculations. 🙏

@@chaitanya9186 The arithmetic behind the downside risk is pretty easy. If you're selling 10 ICs with $1000 wings, thus a $10,000 max risk, what premium are you getting for that risk? For something like the 11 delta mentioned in the video, let's say your premium is 10% of the wing spread, so $100 per contract; $1000 premium total. If you had one max loss of $10k, you'd need 11 complete winning plays - both short legs expiring worthless, to not be losing (not 10, because you're paying for 40 option commissions to enter a position with 10 iron condors, and for the times you buy to close you have another 40 commissions to pay to get out). And the reality is that holding ICs to expiry is insane if you were selling a decent length of time premium such as 45 days; a month and a half will pretty routinely seeing one side of a condor breached if you're in a trending market. You're more likely to sell out half way, so retaining maybe $500 of that original $1000 premium. Now you need to have 21 winning plays to offset 1 max loss. Loss control in ICs (any options play really) is very important because of this.

You said yourself, risk is low, as well as reward. So the most you lose is a fraction of what you've made. unless your putting 100% in every time. Never put all your eggs in 1 basket.....lol

I just scalp 0dtes throughout the day with a tight sl and a low take profits

Tasty live is far better, the content you see on this channel originated from Tasty Live with their decades worth of research and access to CBOE records. This channel rehashes that info then tries to sell you a training workshop when longevity is the key factor to build market familiarization

Thanks for that Steve , I do know what i want to do in life actually, so stop thinking for me

Bingo. I often think of Delta as probability IF I picked the right direction haha

So how do you have l gauge probability of success then

@@lobsterstrange when delta is 50, your odds of success may be about 35%. As delta approaches 100, or approaches 0, the idea of delta estimating probability gets more accurate. However even that is pretty half-assed for iron condors, the delta-as-probability notion applies to each side, is influenced by how strongly prices are skewed to one side, and by market fear, and how long you hold the position relative to expiry. In other words, all these simplistic numbers fed to you by KZfaqrs are often complete b/s; it gets them revenue from views, likes, and subscribes.

Instead of delta which can change rapidly, you will be much better off first getting a solid understanding of support and resistance areas and place your condors accordingly

Why does it have to be 60 day contacts. What changes if you were to try this on weeklies or monthlies?

You mean 50% remaining Extrinsic.

if you re-watch it, you should see it about a half minute in advance of when he made that comment, not during or after his comment.

"7DTE $5 wide SPX"? Could you give me actually numbers...like buy 4570c on dec 5 etc?

Jan3 SPX [7DTE] Sell 4695/4690 Put Spread + Sell 4880/4885 Call Spread for $50 86% POP

These are taining wheels, you wont get rich on this but you are only putting up $450 so return on risk is good. and you can get your feet wet.

I appreciate that. I was asking for for a real example with real numbers not just $5 apart. English is my second language and don;t understand your example. Do you have actually numbers and dates?@@jonathanvankleeck97

Yes, I caught that as well.

Does that country have tax deferred retirement accounts?

@@Brayness Of course not. There is a public pension scheme that is continuously under repair, with politicians unable to make the necessary reforms. If we don't believe in the longevity of this system, we have to provide for our old age ourselves somehow. Stock market volunteers for that purpose, but the mentioned 'funny' tax regulations are counterproductive. Utopia looks different.

The video showed the Delta 20, 18 days before expiration.

Im curious why cant you backtest it yourself for the years you deem non-ideal?

2022 IS a BAD year (bearish)

@@Cosmic_Hobo because most people aren't going to fork out the money for quality historical options data just as a learning exercise before getting into ICs; hint, it's ruddy expensive and accessing that data is a learning curve of its own. And most people don't have a background in stochastic calculus to estimate the history based on free daily data for the underlying security. The positioning of the wings in an IC and the premiums received changes quite a bit with implied volatility, and since implied volatility has only a loose relationship to realized volatility (the former is the market psychology, the latter is actual market movement) even trying to estimate data is pretty dubious.

@reidpinchback8850 If one lacks both the minimum funding needed to access quality data and the skills to interpret freely accessible data, I'm of the view those should be their primary concerns before trying to be an options trader unfortunately.

@@Cosmic_Hobo ICs have their place but I'd suggest finding content that realistically discusses the challenges around them. For example, periods of very volatility are usually crappy for selling ICs. Also, the first time a broker forces assignment on one leg and you've suddenly got almost 50 grand of SPY per contract and a corresponding margin debt, can take your breath away.

You manage your losers so they don’t lose 5X. Use logic.

But you just get the shares.. which you can sell

Then we should be looking at the size of our trades to minimize this frustration

Just like RR is worthless, you can have a 1:1000 RR but your win rate is 0% you will lose lmao it’s all relevant bro

@@vicpso1not on the SPX, it’s just gone.

they dont do stops. their scenario is always "managed" perfectly.

@@Eqnotalent I mean what would the loss be if they are wrong? Seems huge.

...and that's assuming you can trade these spreads at mid prices for all 4 legs - unlikely.

No options strategy, by itself, is a winning strategy. Option chains generally aren't priced high enough that they have positive expected value. If they were, options sellers would keep getting richer and richer until the market makers finally went broke. You make these strategies succeed by 1) Having an edge (something that makes you right more often than wrong) and 2) Managing the trade when it goes against you (as explained later in the video).

You would lose all $8400 if you chose not to manage the IC to expiration. If you manage it by rolling, you can still make a profit but not as much as anticipated or small loss. OR you could close the IC completely for a smaller loss than full. The video did briefly discuss risk management by showing the roll.

Yes, I trade 1DTE SPX at around the 5-7 Delta and make $100 per $2K of risk put on every day.. If the trade goes against me, I roll up the tested side and put on additional contracts to pay for it. and or roll up the untested side and collect more premium. Good management helps to create a higher effective POP than just the normal statistical rates would predict.

First of all, the option class he is referring to is FREE. Second, from your comment you don't understand options and should do something else with your money.

It is a good trade, and it will absolutely work, however the setups are not what I would do without having a very good understanding of the risk. 10 contracts at $10 wide is not what you want to start with while you are learning, but you COULD do one contract at $5 wide and learn the process. Most importantly you REALLY need to know how to manage trades that go against you, it is quite easy to speak generally in a video, but when you have a bad trade affect your netliq it is anther matter altogeather.

Put it this way; if you do 10 trades 1 trade loss 8400 9 trade wins 14,400 So net profit $6000 But you started your account with $8400 Hence you lost -$2400 But if you do 100 trades You potentially lost 10 trades $84,000 You potentially wins 90 trades or $144,000 So your nett profit $60,000 Conclusions: One needs to do a LOT of trades to put the odds in your favour

There is a sweetspot, which in my opinion is around 5 to 7 delta, I exclusively trade 1 and 0 DTE SPX and NDX at around 7 Delta, and collection about $100 (if possible) for every $2K of risk.

stop with these 4 legged plays... they are so lame.

what do you suggest better than these ''4 legged plays''?

@@elivy228 An iron condor requires level 4 which means a huge majority of the KZfaq audience doesn’t even have that access. So I don’t get why they assume every KZfaqr can even employ this strategy. Also the hedging at every turn is not how I like to trade. But ultimately they need to figure out their audience can’t even execute what they recommend because the broker won’t allow them.

These are meant to be sales pitches for newbies

KZfaqrs will generally try to hit around 20 minutes unless they are doing shorts. It's because otherwise their videos won't get monetized from ad placements. Anybody doing anything shorter than that is creating the content entirely for free unless they have a sponsor paying them.