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

Hey everyone. This is Kirk here again from optionalpha.com and welcome back to the daily call. Today, we’re going to be talking about how to convert a bear call spread into iron condors. The process is actually pretty easy to do. It’s actually probably one of the easier adjustments that you can make and it’s maybe one of the first adjustments that you make to a position as it’s starting to get challenged. Again, the starting position that we’re working with is a bear call spread. That's basically a credit call spread where you are selling a call option and then buying a call option at a higher strike hoping that the stock either stays the same or generally goes down. Now, of course, the stock can go up a little bit. As long as it stays below your strike prices, you’re good to go. You make all of that premium that you collected as a profit at expiration. But when the stock starts to move up against your bear call spread and starts to challenge you, then what you can do is you can convert the position into an i