A personal finance blog about trading, investing, and other wealth building strategies. Learn how to trade options, get trade ideas, and make money online from home.
Maybe an Iron Condor. I am looking at the 25/30/15/10 Mar '10 Iron Condor which is fetching about $1 right now. You make money as long as the VIX trades between $14-$26.
The question you have to ask yourself before putting this play on is where you think volatility is going to be? Will it be directional? Or will it be range bound? What will that range be?
What is the multiplier on the VIX index? Is that how it works? Isn't a condor just a combination of a call spread and a put spread? Or a straddle with protection, either way you look at it?
The multiplier is still 100. And yes an Iron condor is a combination of a call spread and a put spread. So in the above example I was looking at selling the $25/$30 call spread and selling the $15/$10 puts spread.
Maybe an Iron Condor. I am looking at the 25/30/15/10 Mar '10 Iron Condor which is fetching about $1 right now. You make money as long as the VIX trades between $14-$26.
ReplyDeleteThe question you have to ask yourself before putting this play on is where you think volatility is going to be? Will it be directional? Or will it be range bound? What will that range be?
I'm not comfortable with playing an Iron Condor yet. Are you looking at this with VIX options? or options on a VIX ETF?
ReplyDeleteI am looking at the VIX options. Which I believe are all cash settled.
ReplyDeleteWhat is the multiplier on the VIX index? Is that how it works? Isn't a condor just a combination of a call spread and a put spread? Or a straddle with protection, either way you look at it?
ReplyDeleteThe multiplier is still 100. And yes an Iron condor is a combination of a call spread and a put spread. So in the above example I was looking at selling the $25/$30 call spread and selling the $15/$10 puts spread.
ReplyDeleteOK, I definitely want to talk more about this tomorrow then.
ReplyDelete