The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about how to convert a bull put spread into an iron condor. Let's start with the first part of this trade which is entering into a bull put spread. The idea behind a bull put spread is that you’re selling option contracts on the put side below where the stock is trading, hopefully seeing the stock either stay the same or potentially rally higher. Now, you could actually see the stock fall and still make a profit as long as it stays above your short strike price. If we have a stock that’s trading at $100, we might sell a 95 strike put and buy a 94 strike put to create a 95/94 bull put spread. The idea is we hope that the stock continues to rally higher or stays the same around 100. It can fall. As long as it stays above 95, we’ll still make money. Now, when you want to start converting these into an iron condor would be when the stock starts to move against you. One of the very easy tech