Traders in an IRA account have often become well acquainted with the Iron Condor strategy and its two varieties: static and dynamic. Today, Tom and Tony nail in some realistic expectations for what we can expect to gain and lose when trading static Iron Condors.
Looking at the short 30 delta Strangle with added wings $5, $10, and $20 out in the S&P 500 ETF (SPY), Tom tackles how often we were able to manage these trades for profits at 50% of the credit received and how often we took full losers on the defined-risk trade.
The historical results showed that the most risky Iron Condor – the $20 wide strategy – made the most on average and had the largest percentage of trades that could be managed for the full 50%. What was even more interesting was the fact that the riskiest trade exhibited the fewest max losers as well. These historical results can help us to understand the risk-reward relationship of static Iron Condors going forward. Check out the segment above for greater detail.
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