Today, on this segment of "Strategies For Your IRA", Tom Sosnoff and Tony Battista discuss creating a broken wing iron condor in Monsanto (MON). This is a defined risk trade and as such can be placed in an IRA account.
Monsanto made highs in February but since then it has lost 18%. Earnings were reported a week ago but IV Rank is still at 85%. That provides an opportunity to short premium.
Tom and Tony reveal their neutral to bullish trade in MON and why they chose it. It is a slightly skewed iron condor (risk defined) which is sometimes called a broken wing iron condor. They discuss the stock price, the cost, the buying power reduction (BPR), days to expiration (DTE), break even prices and probability of profit (POP). The boys noted that this trade was close to a synthetic strangle. A table shows the expiration month, strikes used, credit for the put spread, credit for the call spread and total credit received.
Tom and Tony also display MON's correlation of daily returns to the SPY, QQQ, IWM, DIA and TLT. A chart, like the kind sent daily to BOB subscribers, charts the ETFs mentioned above and Monsanto for IV Rank by implied volatility and shows MON is in the ideal area.
Watch this episode of "Strategies For Your IRA" with Tom Sosnoff and Tony Battista to examine the broken wing iron condor, a defined risk trade eligible for an IRA, that was traded in this segment.
The traders in this segment are using features of Dough, our trading platform.
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