Combat Today's Markets With The Unbalanced Condor
Today I want to talk about a strategy that not many option traders know about which is called an Unbalanced Condor. This strategy has been around for a while I am sure, but for some reason, it's not very popular. Personally, I have been studying options for over a decade now, and I took many popular courses that you'll find on the Internet. After spending nearly $50,000 on my options education, I find it rather intriguing and erroneous that most option courses are not teaching this strategy.
Why has the Unbalanced Condor been lost? Why is this strategy unheard of? To me it's a little more obscure than the Broken Wing Butterfly, which is another strategy that most option traders don't know how to manage. I think the reason that these strategies are not so popular is because most traders want to make money really fast. The problem with this point of view is that this causes 99% of them to lose most of their money. Remember, making money fast usually equates to losing money faster. Let's look at a concept of making money slower and lowering our risk.
How would you like to trade options in circumstances where it's nearly impossible to lose money in one direction while having a near one hundred percent guarantee that you will make money in another direction? Sounds ideal to say the least right? What if I told you that you can even make money on your trade of the market doesn't move at all? It looks like the perfect strategy on paper. It would appear there's no way to lose!
Well, if you don't know what you're doing, it is possible to lose something on this trade. In fact, you could end up loosing quite a bit. If you're too aggressive in your trade and try to make money too fast with it, you can lose a lot. Patience is the secret to the Unbalanced Condor. Once you've learned the simple adjustments that go along with the spread, your worst-case scenario would result in a mere one to two percent loss.
There are not many experts on this strategy, but it's one of my specialties. Currently, I am not aware of much education on this strategy at all, but I've been developing and redefining this strategy over the last three years with my trading group. I have developed ways to lock in profits on this strategy as I make them. I have developed ways to manage this trade over different types of markets. I've developed ways to neutralize the Vega position on this trade while maximizing Theta. I call this trade the "Revolver" because it's an awesome way to combat today's unpredictable stock market.
To learn the ins and outs of this unsung strategy can really help improve your option trading. The first step to success with options is to control your risk, and by trading with Unbalanced Condors is one of the best ways you can ever do this. If you do your research, you just might find that this is the strategy you have been looking for over the years and never knew how to find it.
Article Source: FxTradingStock.com
About the Author
Don't be ordinarily Option Trading! Learn safer, innovative strategies like the Unbalanced Condor at San Jose Options!
by: Donald Scott
Total views: 52
Word Count: 535
Date: Wed, 7 Jul 2010
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