What market conditions are best for credit spreads & iron condors?
This strategy works well in moderately bullish or bearish markets, and sideways, range-bound markets. If the market moves more than a few % then this is not good for this strategy and we will need to make adjustments on our trades. Historically, the market will make significant upward or downward moves 4 to 5 months out of the year and we’ll usually be in adjustment mode moving our trades during these months. During adjustment periods 4 to 5 months each year we’ll typically book -2% to -5% losses per month. Historically, the market will trade range-bound for 7 to 8 months each year and this is when we can book +7% to +10% realized gains per month. When adding up the winning months and the losing months over 12 months we can usually make a handsome, positive annual return.
What market conditions are best for credit spreads & iron condors?
This strategy works well in moderately bullish or bearish markets, and sideways, range-bound markets. If the market moves more than a few % then this is not good for this strategy and we will need to make adjustments on our trades. Historically, the market will make significant upward or downward moves 4 to 5 months out of the year and we’ll usually be in adjustment mode moving our trades during these months. During adjustment periods 4 to 5 months each year we’ll typically book -2% to -5% losses per month. Historically, the market will trade range-bound for 7 to 8 months each year and this is when we can book +7% to +10% realized gains per month. When adding up the winning months and the losing months over 12 months we can usually make a handsome, positive annual return.