Contents

Long CALL Condor

What is a long CALL Condor?

  

  • Long CALL Condor is a neutral outlook strategy that is built by using only CALLs. It can be visualized as a combination of in-the-money Bull CALL Spread and out-of-the-money Bear CALL Spread.
  • It is built by buying a lower strike ITM CALL, selling a higher strike ITM CALL, selling a higher strike OTM CALL and buying a higher strike OTM CALL.
  • It is a popular positional strategy traded on the Index options for consistent income. The profit potential is higher closer to the expiry. It is traded primarily on index options as they are less volatile.

Trade Set-Up

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Buy 1 lower strike ITM CALL

Naked Call 1-Finvezto

Sell 1 higher strike ITM CALL

short call-Finvezto

Sell 1 higher strike OTM CALL

short call-Finvezto

Buy 1 higher strike OTM CALL

Naked Call 1-Finvezto

Long CALL Condor

Iron Condor 1-Finvezto

Entry Checklist

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Market Outlook
  • When you have a neutral outlook and expect the price to stay in a tight range.
  • When price is between a support and resistance zone.
  • Volatility
  • Initiate the strategy when the implied volatility levels are neither moving up or down and quite stable
  • Risk Profile

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    Risk [Loss]
  • Maximum Loss is limited to the net debit paid
  • Reward [Profit]
  • Maximum profit is limited and occurs when the price ends between the two middle strikes
  • Break Even Point
  • Lowest Strike CALL plus the net debit paid
  • Highest strike CALL minus the net debit paid
  • Options Greeks Impact

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    Time Decay Impact [Theta]
  • Time decay is helpful for the position as long as price stays closer to the middle strikes
  • Time decay is harmful when price moves closer to the outer strikes
  • Volatility impact [Vega]
  • Increase in Volatility is harmful around the middle strikes and you want volatility to decrease wen price is around middle strikes
  • Increase in Volatility is helpful when price is close to the outer strikes
  • Trade Management & Exit

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    Stop Loss & Exit
  • Risk should be limited to 1-2% of your capital.
  • Exit when the price breaks the support or resistance identified while initiating the position.