This Trade Can Make Money Whether A Stock Goes Up Or Down
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One of my favorite trading strategies—and one that big-time money managers and volatility traders use—is trading an iron condor.
An iron condor is selling a downside put spread and an upside call spread at the same time. In this scenario, you cap your risk because you have a spread with a defined loss.
At the outset, the iron condor strategy is a market-neutral trade. You are not making a prediction on which way the market is headed. Rather, you are making a bet that the market will not have a large move in either direction before the expiration date of the options that we are selling.
This post originally appeared at Investors Alley.
Category: Options Trading Strategy
