What are some good options trading strategies for the purpose of monthly income generation.An iron condor is a type of option trading strategy with four different contracts—selling two options and buying two options—but works as a single trade. Trading iron condor could be perfect for new or under-capitalized traders as it does not require a high capital.One cannot expect higher profits in comparison to risky trading options and at the same time does not expect a greater loss. Iron condor strategy is one of the safest strategies that can be used for index options. Iron condor is a conservative strategy which can give you around 2 to 2.5% kinds of returns on monthly basis if properly executed. Ideally one needs to create iron condor at least 45 to 50 days in advance of expiry to get good credit and at the same time one must know what kind of adjustment you need to do when market moves in one particular direction. In iron condor the trader has to take risk to get rewards in return.
- Iron condor trading strategy have four distinct contracts where they sell two choices and buy two choice—yet it functions as a single trade.
- Trading for iron condor begins by selling to start out-of-the-money put and call.
- One can making big profits with this technique and earn the highest possible profit.
“Iron condor trading starts by selling to open out-of-the-money put and selling to open out-of-the-money call. The put option is the stock price lower than the current market price of the stock, while the call option is the stock price higher than the current price of the stock.”