Iron condor example5/10/2023 Namita Godbole, Email: Support desk helpline: 8976689766 Brokerage will not exceed the SEBI prescribed limit.Ĭompliance Officer: Ms. If sale/ purchase value of share of Rs.10/- or less, a maximum brokerage of 25 paisa per share may be collected. Digital account would be opened after all procedure relating to IPV and client due diligence is completed. Investment in securities market are subject to market risk, read all related documents carefully before investing. ![]() 10/order is available with Power Investor & Ultra Trader Packs. *Brokerage will be levied flat fee/executed order basis and not on a percentage basis. B-23, MIDC, Thane Industrial Area, Waghle Estate, Thane, Maharashtra - 400604 But there is a tradeoff this is a limited reward to risk ratio strategy for advance traders.ĬIN: L67190MH2007PLC289249 | Stock Broker SEBI Regn.: INZ000010231 | SEBI RA Regn.: INH000004680 | SEBI Depository Regn.: IN DP CDSL: IN-DP-192-2016 | AMFI REGN No.: ARN-104096 | NSE Member id: 14300 | BSE Member id: 6363 | MCX Member ID: 55945 | Investment Adviser Regn No: INA000014252 | Registered Address - IIFL House, Sun Infotech Park, Road no. Long Call Condor has a wider sweet spot than the Long Call Butterfly. Analysis of Long Call Condor spread strategyĪ Long Call Condor spread is best to use when you are confident that an underlying security will not move significantly and stays in a range of strikes sold. Gamma: The Gamma of a Long Call Condor strategy goes to lowest values if it stays between sold strikes, and goes higher if it moves away from middle strikes. Theta: A Long Call Condor has a net positive Theta, which means strategy will benefit from the erosion of time value. Therefore, one should initiate Long Call Condor spread when the volatility is high and expect to decline. Vega: Long Call Condor has a negative Vega. Net Payoff from 1 deep OTM call bought (Rs) 9300ĭelta: If the underlying asset remains between the lowest and highest strike price the net Delta of a Long Call Condor spread remains close to zero. Net Payoff from 1 ITM Call sold (Rs) 9000 ![]() Net Payoff from 1 Deep ITM Call bought (Rs) 8900 Following is the payoff schedule assuming different scenarios of expiry. Furthermore, the resulting profit and loss would offset and net premium paid would be lost.įor the ease of understanding of the payoff schedule, we did not take in to account commission charges. ![]() If the underlying assets expire at highest strike, all the options below the highest strike would be In-the-Money. If the underlying assets expires at the lowest strike then all the options will expire worthless, and the debit paid to initiate the position would be lost. In the mentioned scenario, maximum loss would be limited up to Rs 4500 (60*75) and it will occur if the underlying assets goes below 8960 or above 9240 strikes at expiration. The maximum profit would only occur when underlying assets expires in the range of strikes sold. Maximum profit from the above example would be Rs 3000 (40*75). This strategy is initiated with a neutral view on Nifty hence it will give the maximum profit only when there is little or no movement in the underlying security. ![]() The net premium paid to initiate this trade is Rs 60, which is also the maximum possible loss. A estimates that Nifty will not rise or fall much by expiration, so he enters a Long Call Condor and buys 8900 call strike price at Rs 240, sells 9000 strike price of Rs 150, sells 9200 strike price for Rs 40 and buys 9300 call for Rs 10. Limited (Maximum profit is achieved when underlying expires between sold strikes) Neutral on market direction and Bearish on volatilityĪnticipating minimal price movement in the underlying assets The ITM and OTM call strikes should be equidistant.īuy 1 ITM Call, Sell 1 ITM Call, Sell 1 OTM Call and Buy 1 OTM Call How to construct a Long Call Condor?Ī Long Call Condor can be created by buying 1 lower ITM call, selling 1 lower middle ITM call, selling 1 higher middle OTM call and buying 1 higher OTM calls of the same underlying security with the same expiry. When to initiate a Long Call CondorĪ Long Call Condor spread should be initiated when you expect the underlying assets to trade in a narrow range as this strategy benefits from time decay factor. The maximum profit from condor strategy may be low as compared to other trading strategies however, a condor strategy has high probability of making money because of wider profit range. Long Call Condor options trading strategyĪ Long Call Condor is similar to a Long Butterfly strategy, wherein the only exception is that the difference of two middle strikes sold has separate strikes.
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