Kal's got a new book! Get your copy and a FREE Class right here!
https://learn.sharpertrades.com/p/learn-to-trade-7-days-options
Docusign is post earnings and been on a downward slide for a while. But with the huge drop comes a rise in volatility and we LOVE volatility.
Since this stock has gone down so far so fast, as contrarians, we are going to skew this Iron Condor slightly upward (meaning the Put side is closer to the stock price than the Call side).
Meaning, we are betting that it will stay in a range but we will leave more room to the upside because we feel it is closer to reaching its lows than possibly bouncing back to some highs.
The other addition is we are taking risk off the upside. We do that by collecting enough credit to cover the width of the strikes to the upside. Meaning, since the Call Side is $2, as long as we collect $2 credit or more when we make this trade, we take away all the risk to the upside.
How? If we were to breach the upside and go past 59, the Call Vertical would be a full loser (meaning, we would lose $2). But since we collected $2 credit when we Sold this Skewed Iron Condor, that $2 credit covers the $2 loss and we lose nothing to the upside.
The cost for this is, we need to make the Put Vertical $5 in order to collect $2 total on this trade. Meaning, there is $3 risk to the downside ($5 width - $ credit). Nothing is for free in the stock market. We take more risk on the downside to achieve zero risk to the upside.
Hopefully, that makes sense :)
Kal
➤ This is a trade from my Option Alert System (see link below). My Alert system sends out 2-3 trades per week in real time, and also sends out alerts on when to manage these trades for the best possible profit and success rate.
If you are really interested in learning to trade, this is the best way and, at only $1 for the 1st month, a cheap way to test it out. You can use the link below to join.
https://learn.sharpertrades.com/p/option-alert-trading-signal?coupon_code=BASIC1YTB
➤ If you really want to learn to trade, check out our Iron Condor option trading course
https://www.udemy.com/course/option-trading-for-rookies-advanced-option-strategies-iron-condor/?referralCode=05F82F8D48036DFB3A92
➤ Sign up to our blog to receive trade ideas and market updates.
learn.sharpertrades.com/blog
#OptionTrading #TradingOptions #Trading
Trading Risk Disclaimer
All the information shared in this video is provided for educational purposes only. Any trades placed upon reliance of SharperTrades.com are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, commodities, options and forex, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can never be guaranteed. This is not an offer to buy or sell stocks, forex, futures, options, commodity interests or any other trading security.