TT - MM: Iron Condors - How Much Premium, 11/05/13

TastyTrade - Market Measures

Carry-out:

• Entry: look back 5 years in AMZN, GOOG, and SBUX
• High IV Rank (> 50%)
• Sell Iron Condor w/45DTE:
• Collect 33% and 45% width of the spreads
• Compare to 1SD IC
• Exit: hold until expiration

• The risk on an iron condor is inversely related to the reward (credit taken in).
• During high IV rank the 1SD strikes are too conservative and carry too much risk in extreme cases.
• Sweetspot for high IV Rank Iron Condor:
• IV Rank above 50%
• 45DTE
• 45% Credit