Thread by @Stocktwit_IN

If our view is neutral we can deploy many strategies depending on our RISK : REWARD

One strategy among them is IRON CONDOR/IC

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A Thread 🧵🧵🧵🧵 by Swapnil Kommawar
@KommawarSwapnil

👉IRON CONDOR

Iron condor is basically and extension of short strangle which is hedged for overnight positions

👉In short strangle we will short OTM CALL and PUT

👉If we buy call option at higher strike than the shorted call option strike

👉Buy the put option at a strike lower than the shorted put option strike, it becomes IC/IRON CONDOR

👉As we are buying OTM options as our reward would be less compared to SHORT STRANGLE and RISK IS ALSO LIMITED

👉As long as the UNDERLYING trades between the two shorted strikes of CE and PE, then we will make good returns

👉The hedges can that we are buying can be determined based on the risk we want to carry out

👉More the distance between the two strikes more the risk

👉If we compare the SHORT STRANGLE and IRON CONDOR, we will know the difference

👉As IRON CONDOR limited risk and limited reward strategy, margin requirement is also less

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