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 you can adjust iron condor option strategies. As a basis, iron condor strategies as many of you know are neutral option selling strategies whereby you are selling a call spread and a put spread around a stock’s price. For example, if a stock is trading at $100, you might sell the 105/106 call spread and the 95/95 put spread, so creating a call spread above the market and a put spread below the market, taking in a net credit on the sale of those option contracts. Now, once you start getting challenged on an iron condor assuming that the stock either moving against your call side position or against your put side position, the rules of adjusting iron condor option strategies are that we first do not adjust the challenged or tested side of the strategy. This means that if the stock is moving up against your call spread side, let's say the stock is moving from $100 where it initia