http://www.monthlycashthruoptions.com/index-option-trading-options-trading-blog/2010/how-to-trade-trading-tips-and-sp-500-rut-technical-analysis-on-iron-condor-options-and-credit-spreads/290/ Fri, 03 Dec 2010 02:05:26 +0000 hourly 1 http://wordpress.org/?v=3.3 http://www.monthlycashthruoptions.com/index-option-trading-options-trading-blog/2010/how-to-trade-trading-tips-and-sp-500-rut-technical-analysis-on-iron-condor-options-and-credit-spreads/290/comment-page-1/#comment-671 bradrr Sun, 03 Oct 2010 05:05:47 +0000 http://www.monthlycashthruoptions.com/index-option-trading-options-trading-blog/?p=290#comment-671 Yes, the risk reward for the credit spread is the same whether the spread is 10 points wide or 20 points wide. However, we strongly recommend that our subscribers have two accounts when trading the RUT because we want to maintain maximum flexibility allowing us to open the other side of the spread to complete the iron condor. In order to complete an iron condor where maintenance is only held for one of the spreads, both the top bear call spread and the bottom bull put spread need to have the same point width between the sell leg and the buy leg. It is true that if we end up creating a 20 point wide spread on the bottom that we can easily open a 20 point wide spread on the top to complete the iron condor...and this will work. However, for most months we are alternating between opening the top spreads and the bottom spreads, so it's better to keep all of our spreads 10 points wide giving us maximum flexibility to complete the iron condors. Yes, the risk reward for the credit spread is the same whether the spread is 10 points wide or 20 points wide. However, we strongly recommend that our subscribers have two accounts when trading the RUT because we want to maintain maximum flexibility allowing us to open the other side of the spread to complete the iron condor. In order to complete an iron condor where maintenance is only held for one of the spreads, both the top bear call spread and the bottom bull put spread need to have the same point width between the sell leg and the buy leg. It is true that if we end up creating a 20 point wide spread on the bottom that we can easily open a 20 point wide spread on the top to complete the iron condor…and this will work. However, for most months we are alternating between opening the top spreads and the bottom spreads, so it’s better to keep all of our spreads 10 points wide giving us maximum flexibility to complete the iron condors.

]]> http://www.monthlycashthruoptions.com/index-option-trading-options-trading-blog/2010/how-to-trade-trading-tips-and-sp-500-rut-technical-analysis-on-iron-condor-options-and-credit-spreads/290/comment-page-1/#comment-669 Bob Wilber Thu, 30 Sep 2010 21:18:52 +0000 http://www.monthlycashthruoptions.com/index-option-trading-options-trading-blog/?p=290#comment-669 Having a May RUT 550/560 bear call spread in one account and a May RUT 560/570 bear call spread in another account is exactly the same as having a single May RUT 550/570 bear call spread. The P&L is exactly the same. The net Greeks are the same. The margin required is the same as the total margin required for the two separate accounts. So it makes no sense to have two accounts. Just keep the net position in one account. Having a May RUT 550/560 bear call spread in one account and a May RUT 560/570 bear call spread in another account is exactly the same as having a single May RUT 550/570 bear call spread. The P&L is exactly the same. The net Greeks are the same. The margin required is the same as the total margin required for the two separate accounts. So it makes no sense to have two accounts. Just keep the net position in one account.

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