Adjusting Iron Condor Positions - How to Keep From Losing Your Shirt

If you're going to trade the iron condor option strategy, then you must have a prepared strategy for adjusting iron condors. You need to have this in mind before you begin opening your credit spread "wings". The worst thing for you is to be wiped out by an unexpected large move in the index or underlying asset. Just a couple of these can annihilate your account.

It is imperative that you be prepared in advance for adjusting iron condors because your potential losses in this strategy are always substantially greater than your potential gains. This is largely because the way to success with the iron condor is by figuring out an approach that is high probability (you are probably right about what you anticipate). So a large movement one way or the other, or even just one that is larger than you hoped for or anticipated, threatens to cost you big time.

The Keys to Successful Iron Condor Strategy

- Know that there are different ways for adjusting iron condors. You don't have any "mandatory" method for doing so that you must follow.
- Always be protective of your profits with a conservative approach.
- Never allow the inevitable small losses to morph into big losses.
- Be accepting (although not excited) about the fact of small losses and never let them beat you down.

Your key to success in trading this strategy is consistency in gaining profits. These profits must be protected. Adjusting iron condors must be done according to one or more pre-planned strategies whenever the possibility for a large loss looms.

David_P._Andrews

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