Your Action Items. Add ADX & ATR to Graph Model your 1 st Delta Neutral Iron Condor Save trade in OptionsPro Put Condor Week on your calendar

Transcription

1 Your Action Items Add ADX & ATR to Graph Model your st Delta Neutral Iron Condor Save trade in OptionsPro Put Condor Week on your calendar

2 Add ADX & ATR to Graph. Right click on graph. Move mouse over Add Study. Left click on Average Directional Movement 4. Uncheck Display +DI/-DI 5. Click OK 6. Repeat steps - and add Average True Range 7. Stack Studies - drag one section on top of another 8. Right click on graph 9. Move mouse over Template 0. Left click Save As Default Add ADX to Chart (part ). Right click on the graph. Mouse over Add Study. Left click Average Directional Movement

3 Add ADX to Chart (part ).Uncheck Display +DI/-DI.Click OK Add ATR to Chart. Right click on the graph. Mouse over Add Study. Left click Average True Range

4 Stack Studies (part ). Move your mouse over the name of the Study It will become highlighted in blue. Left click & hold down mouse button. Drag mouse over another section and let go of mouse button & Stack Studies (part ). After stacking both ADX & ATR with Over/Underpriced, it will look like this. Save as Default. Right click on the graph to access the menu.. Move mouse over Template 4. Left click Save As Default & 4

5 Model Delta Neutral Iron Condor For this assignment, you will assume three things: You are neutral on the overall market. ATR is on the low end of range on the stock. ADX is below 0 on the stock & market. The stock s options are overvalued. Model Delta Neutral Iron Condor. Load Options Chain. Select expiration date -45 days away (prefer closer to days & monthly expirations for stocks). Select Call to Sell with Delta less than 0 4. Select Call to Buy as insurance 5. Select Put to Sell with Delta less than 0 6. Select Put to Buy as insurance 7. Model trade using Risk Graph 8. Enter Fill prices so you can track the trade 9. Save trade in OptionsPro 5

6 . Load Options Chain.Left click on Chain.Type the ticker symbol in the box at the top.press Enter. Select Expiration -45 Days Away. Click Clear at the top. Click Multiple Expirations. Select an expiration -45 away (prefer closer to days & monthly expirations for stocks) 4. Uncheck unneeded expirations 6

7 . Look in the Calls section. Locate a Strike with Delta < 0. Select Call To SELL. Click the Bid price & you ll notice it fills in this order at the top Note: In this example, we chose the 0 strike. It also had plenty of Open Interest and Volume.. Choose a Strike above the one you sold Note: The higher you go, the higher your Max Profit but it also increases your Max Risk. 4. Select Call To BUY. Look for Open Interest of at least 00. Click the Ask price & notice it fills in this order at the top Remember the Pro Tip: With stocks you should choose strikes closer together With indexes you can have them farther apart. 7

8 . Look in the Puts section. Locate a Strike with a Delta that matches the Call you sold 5. Select Put To SELL Note. Click the Bid price & you ll notice it fills in this order at the top Note: ) In this example, even though the delta box is blank, you can tell that the delta would be around 6. Sometimes a blank box appears due to a calculation issue. ) While setting up this trade the Delta of the Call changed from 6 to 7 so we will select the 7 Delta for the Put. Note. Select the Strike which is the same distance away as the Call side of the trade. In this example, the Calls were separated by 5 points. So your Puts need to be separated by 5 points. 6. Select Put To BUY. Click the Ask price & notice it fills in this order at the top. Notice the Trade is Delta Neutral. It is less than.08. 8

9 6. Model Trade Using Risk Graph (pt).right click on the trade.click Risk Graph 6. Model Trade Using Risk Graph (pt) Note three things:. Max Profit. Max Risk. Entry Price Model more contracts to see how that affects things. & 9

10 . Click Edit Spread. Enter Fill Price you can enter the Mid price to model 7. Enter Fill Prices. Click OK Note: You can also adjust the # of Contracts by increasing the Quantity. In this example, we changed it from to 5 contracts.. Click File. Click Save Page As 8. Save Trade. Type a name & Click Save Tip: Naming conventions vary, but you ll want to have a way to remember ) The ticker ) Type of Trade and ) The Date 0

11 . Click File. Click Open Page How To Reopen Trade Later. Double click on your trade Iron Condor Trade Modeling Ticker Symbol Expiration Date Days to Expiration Side of Trade Calls Puts Short Option (sell) Long Option (buy) Max Profits Max Risk Strike Price Delta Strike Price Delta Strike Price Open Int Strike Price Open Int Contract 5 Contracts 0 Contracts Contract 5 Contracts 0 Contracts Entry Price