I am trying to create a system/plan for the Iron Condor Strategy in NIFTY and BankNifty. Wanted inputs of how everyone adjusts there iron condors here. What are the trigger points whether delta doubling or breach of short sides etc. and how does one makes adjustments then?
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It depends on the view you have on the market. Few suggestions I can list are,
- Roll down/up the untested side. I usually do it when the tested side premium is double the value.
- Wait for a day or so, even after this if the market is moving aggressively in the opposite direction do a martingale. I.e close the tested position and sell twice the quantity to open the new position.
- Even after this if you are still making loss. I will just close the position and take a fresh trade.
I just usually have multiple strike in the iron condor to reduce the risk(reduces the return as well)
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If one side of iron condor is breached covert it into ironfly watch tastytrade how to manage you will learn a lot
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Ironfly will also be breached, how would you do that?
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Ironfly is formed by rolling down/up your untested side to the strike price of the tested side. You would have already adjusted 2-3 times to reach this state.
From here, the best option is to close the trade instead of fighting with it.
If you still want to adjust, you can go inverse but you have buy back for a loss (most cases). This can be used to limit the losses. However, since it is already a risk defined strategy, no big advantage my going inverse IMHO
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@Vivek88 iron fly defence while starting with Strangle seems more of a natural transition. Have you tried that? You prefer leading with IC compared to Strangle?
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Definitely strangles are easier to manage and adjust. I prefer ICs mainly because of the margin benefits. Strangle decays faster and can get out of the trade once we reach a good profit target 
My trades usually are strangles on the monthly and ICs on the weekly. Even in the ICs, it is not a strict iron condor, the protection I buy are more for margin benefit than to define the risk.
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even i do strangles both weekly & far months…no adjustments ever needed as long as you know the safe strikes…conservative but consistent
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And those penny buys, could at times help if you choose to roll the tested side I suppose @Vivek88
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What is Long Call Condor Option Strategy?
- Long Call Condor Option Strategy is a range bound strategy. It offers a good Reward / Risk with low cost. Long Call Condor is directional neutral strategy.
When to Execute?
- When you expect less volatility in the stock. It is similar to Call Butterfly Spread with variation that instead of selling 2 ATM Call , we sell 1 ATM Call and 1 OTM Call.In scanario where strike difference between 1st and 2nd strike is not equal to difference between 3rd and 4th strike;it is known as Modified Long Call Condor Strategy.
What is the Trade?
- Buy 1 lot ITM Call, Sell 1 lot ATM Call, Sell 1 lot OTM Call and Buy 1 lot deep OTM Call.
What will be maximum profit?
- Maximum profit in the strategy is when stock expires between the two short calls. Maximum Profit is difference between first and second strike less net outflow.
What will be maximum loss?
- Maximum Loss is net outflow between buy calls and sell call. Maximum Loss is when stock expires at or below first strike or at or below highest call.
What are the advantages?
- Long Call condor provides a high yielding strategy with low cost. It is best suited for low volatility stock. It is idle for current month expiry.
What are the disadvantages?
- Time decay is harmful if the stock is below first strike or above fourth strike call and advantageous if the stock is between second and third strike call.
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Hi Coolbird, for how long have you been trading this strategy ?
have been doing this for past 2 yrs…
@coolbird Please share your 2020 crash experience. Also you do far month and weekly only? Not current or next expiry?
i normally avoid any positions when india vix is above 30 so was relaxing last yr mar/apr as it looked very scary…was only buying stocks/ETFs…i sell +1, +2, +3 months expiry nifty puts & accumulate/average out & book on regular intervals. i do current week expiry short strangles & expiry day strangle as well. but, i;m a safe player & my returns are conservative approx 3% pm over the pledged margin so may not be exciting for risk takers.
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@CoolBird I have tested “roughly” as a daily strangle(around 0.50% premium) with the assumption of no management and 20 day expiry. The chances of all profit wipeout is REAL without management and hedge. And IV expansion is the problem (even if you don’t enter after vix 30)
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i’ve given my strategy developed after lot of backtest & designed a system to detect strikes which is the most important thing… @Vij you may either build your strategy or ignore what i’ve stated but its a waste of time trying to prove your point…
Is that what you are doing? Because I am not. I am just discussing. Good luck!
people like you would never appreciate other’s hardwork & this is the reason many don’t like sharing their strategies in such forums…as we see lot of abuse in other forums…anyway…pls stop & move forward
Abuse? What are you talking about? Dont get all sensitive man. Putting out views is how I brainstorm. Thats how I learn and share, and I suspect thats how it works for many. I think you got this wrong. There is no self importance associated with my messages.
Maybe you are reading my messages in your mind with a different tone 
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i did not say u r abusing…read again “as we see lot of abuse in other forums”, also read whatever you’ve written & you should get the answer…smart people would take the hints & learn while rest would keep bringing others down with their analysis. i’m in the markets for last 10 yrs & still learning …i never had to do any adjustments in my option strategy & though returns are conservative i’m v happy…cheers, relax & good bye
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