In the previous video we showed how to place a weekly options trade entry secret using shorter term options. The thinking was that if we could make a quick profit we close the trade, bank the profit and possibly look to put it on again.
Or if the stock price goes against us, we can just take the FREE do over and roll to the next monthly option cycle and collect more premium.
If you missed previous Part 1, I’ll put a link down below so you can check it out.
In this video, we will take a look and see what happened and discuss:
- How To Manage the Iron Condor Option Trade (Showing a real example on the option trading platform)
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Hey guys, Darren here. We have a great video for you here today!
I want you to take a close look at a strategy that not only limits risk, but this strategy also allows us to possibly make a quick profit. We take a shot when using shorter term options and if it doesn’t go our way, we can very likely get a do-over.
Overall, I promise that we will dig into many different detailed option trading tips and tricks, and dive much deeper into options in future videos. So please do subscribe if you haven’t already.
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Also, be sure to download the FREE options Workshop in the link below.
It talks about the two main benefits of trading options over buying stocks.
DISCLAIMER, I am not a financial planner and I am not recommending trades. Please do your own research and if you are new or learning options, I recommend you start small.
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Review of Iron Condor Trade
Let’s quickly review the shorter term option trade that we placed and see where it is today.
So if you are ready….go ahead and hit that like button and lets begin!
We will go to our Tastytrade account or whichever platform you are using. Tastytrade is one of the best and most intuitive for trading options. I’ll put a link down below. Right now you can get up to $3000 when you fund an account.
We looked at all of the options in COINBASE on the trade tab and chose the Jun 16 chain since it was about a week (just 9 days) to expiration. This is actually a regular option chain since there is no W for “Weekly” next to it. Weekly’s expire every single Friday at the 4pm Eastern Time close. The Regular’s Options close at the 4pm Eastern close on the 3rd Friday of every month.
I probably should have clarified that in the part 1 video!
We were looking to collect $2.01 upfront upon placing this trade.
The stock did move a little and we actually got filled at $1.83 on this one so not quite as good as we were looking at originally. However it is still better than ⅓ the width of the $5 strikes so it’s still good.
Now moving ahead to the 4 Days To Expiration the stock price is at $50.81 and we are still inside the short strikes. The profit range is highlighted in the green.
You can see that we already banked $62 (of the $183 collected up front) due to the much quicker time decay due to only doing a 9 DTE trade.
Do I want to close out and take the $62 winner?
No, I think I’ll roll the dice and go for more money!
If it goes against me, I can just roll out and likely collect additional premium.
You can see there is still $121 in intrinsic value left and there are only 4 days left.
Remember, we are also still near the middle of the profit range so we are not really being tested on either side.
Alright, moving ahead….here is the trade with just 1 day left.
You can see there is just $17 left in the trade. So we have banked $166 if we close now.
However, we are still right in the middle of the profit range with the current $53 stock price.
So hey, if I find $17 on the street, I pick it up. I don’t just walk on by.
I’ll take $17 in a day. So I will wait and just let this expire worthless tomorrow and pocket that $17 bucks.
Maybe grab a bite to eat..
Alright Guys fast forward its Friday and that trade expired worthless and was a complete winner!
Now the IVR is still pretty high in COINBASE at 21, so I still want to have this trade on.
So, just to let you know what I am doing next, I am going to go to the July 21st regular option chain. It is currently at 36 DTE. I am going to $10 wide on the strikes this time and collect $365 for placing this new trade. $333 would be ⅓ the width of the strikes and we collect $365 so its better.
I’ll look to take profits early if possible and if it goes against me, I’ll just roll out and win in the following monthly option cycle.
Now the whole purpose of this video was to show a way that we can take a shot using shorter term options and make a quick profit or roll and get a do-over.
This trade worked out in our favor and we made a quick $183 in 9 days.
If it would have moved against me, I would have closed and rolled to the next regular option cycle, centered the strikes and collected additional premium.
So we either we win now, or win later.
It’s always best to win now…..
Alright guys, if you are a beginner and this sounded confusing do not worry. It will get clearer. Just hit that notification bell below so you are notified of future videos and we’ll learn about some great strategies and opportunities in different stocks and continue to learn and succeed together.
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I’ve put a link down below for the FREE Options Workshop. Be sure to grab that.
Remember to hit like and subscribe and leave a comment. Let me know what you are trading and what you would like to see in upcoming videos.
Thanks for watching. Please share this video with a friend and see you in the next one!