Hi Traders,
The market finally had some movement over the last few weeks and volatility has spiked a bit in the indices. Since I always like to have trades on in indexes, this seems like another good time to throw something on.
We'll go the the index with the highest volatility right now, which is IWM, and throw on a Skewed Iron Condor. A Skewed Iron Condor just means we are moving one side (either the Put Side or the Call side) of the Iron Condor closer to the stock price than the other side.
Why would we do that? We do that if our assumption is that we believe there is a higher chance of the stock price moving in a certain direction. In this case, my assumption is that IWM is closer to its bottom than its top over the next 46 days. With that assumption, I believe there is a better chance it will end higher over the next 46 days than lower.
How do I turn that into a Skewed Iron Condor? Since I believe the stock has a higher chance of moving up rather than down, I will move the Put Side of the Iron Condor a little closer to the stock price and give the call side more room (by moving it a little farther away from the stock price).
Hope that makes sense, and happy trading! Kal :)
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