Monday, December 8, 2008

Learn to make money by trading

People come to BetterTrades from all levels of trading experience: Day traders, passive investors, and beginners. The Better trades experience creates a portal for any trader to learn sophisticated strategies employed by some of the most successful traders on Wall Street. One such strategy is the Iron Condor.
The old saying goes, “There’s money to be made in bull or bear markets”. Today’s volatile economic atmosphere has put many stocks in neutral. The iron condor is a powerful uncovered instrument used to make money as stocks move sideways, consisting of a derivation of an equal number of bull put spreads and bear call spreads. Iron condors are employed by traders seeking regular income on investment capital who speculate that an asset’s spot price will lie between short strikes at expiration with the highest terminal value. Essentially, the trader will construct a position with relatively narrow short strike spreads that are still wide enough to enable the spot price to remain in the range of the short strikes for the contract’s duration. Profits are realized above the lower break even (the sold put strike price minus the total net credit) and below the upper break even (the sold put strike price minus the total net credit). The maximum potential loss in going long an iron condor is the call-put spread difference times the contract size, minus the net credit received.
The mechanics of constructing iron condors involves techniques that are neither hard nor fast. Some traders are proponents of entering into a position 4-10 weeks before the contract’s expiration to avoid negative gamma risk outweighing positive theta risk on shorter durations. Experienced iron condor traders might also avoid entering or exiting into the position on the Wednesday, Thursday, and Friday during expiration week due to a higher probability of narrower bid/ask spreads. Index funds and ETFs are oftentimes more attractive than an individual stock when assembling iron condors due to any potential instability in a single stock that could result from variables like a volatile earnings report or persistent balance sheet concerns. Investors must be aware that commission costs for low net credit trades might render the iron condor unprofitable. Also, the short position may have to be closed out when the short option is approaching-the-money since the net credit received is usually smaller than the maximum potential loss.
Whether you’re a day trader or passive investor, BetterTrades’ investment courses can unlock the secrets of the Iron Condor as well as a number of other vital trading strategies.

The Better trades system speeds the learning curve and allows students to prosper faster. Longtermshortterm provides long term security through short term strategies,which is a concept built into the name itself.

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