Short Iron Fly
#pixarts.trade , #safebull
Market View – Range-bound, not moving The Trade – Sell a put and call at the same strike near the stock price. Your view is that the stock wont go down or up. Buy a lower Put and a higher call for protection on both sides just in case you’re wrong. Premium – Receive Margin […]
Market View – Range-bound, not moving
The Trade – Sell a put and call at the same strike near the stock price. Your view is that the stock wont go down or up. Buy a lower Put and a higher call for protection on both sides just in case you’re wrong.
Premium – Receive
Margin – Required
When To Do
- If the stock will stay still and expire near the sell call and sell put strike.
- Avoid trending markets
- Avoid selling low IV
Pros
- Delta Neutral – Immune to small moves.
- Make money if nothing happens
- Limited loss
- Low vega risk and Theta risk
Cons
- None
Time and Volatility
- Gains time value everyday
- Loses moderately if IV goes up
Max Loss : Strike price of long call – strike price of short call – net premium
Max Profit – Net Premium