Following trade is for educational purposes only. An Iron Condor is an option strategy, where the expected outcome for next week is range-bound.
A CE option mentioned below is a European Call Option, while a PE option is a European Put.
A hedger always buys these options and a speculator mostly sells one.
But when the speculator only sells these options, the risk involved is unlimited and the margin requirement is also high. This is called naked option selling. When both CE and PE are sold, it is called a short straddle.
In combination with this, if we buy much farther CE and PE, the short straddle becomes an Iron condor. Here, the idea is to capture the option premium in a range-bound market with reduced risk and margin compared to short straddle.
The spread between buy and call leg is based on optimum use of margin. Since the option premium is credited to us in advance, it is also a credit spread.
Since this week the view is bearish, we are taking only the CE leg of Iron Condor. As the week progresses, additional trade may be added.
Please leave a comment if you need further clarification on the following trade
My concept of trading is not to be an overnight millionaire, but a disciplined method to grow the wealth that you own. Please leave a like if you like the trade ideas :)
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Intraday range is expected to be 34500-35000 So, wishing all another happy expiry :)