Profiting with Iron Condor Options: Strategies from the Frontline for Trading in Up or Down Markets Hardcover – Jan 19 2011
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From the Back Cover
Use Iron Condor Options to Earn Consistent Returns Every Month with Surprisingly Modest Risk
“Benklifa has devised an elegant strategy to reduce risks while creating consistent profits. His strategic approach to options trading should be a part of every trader’s approach, especially in volatile markets.”
—Michael C. Thomsett, author, Options Trading for the Conservative Investor
“Michael Benklifa is the real deal. His insights into the iron condor strategy stem from years of trading this approach with big money in various market environments. His experience will benefit both beginning and advanced options traders wanting to enhance their knowledge of perhaps the best strategy in options trading.”
—Steve Lentz, DiscoverOptions
“Very few books explore a trading strategy in the kind of detail that Benklifa has applied to condors. It’s all here—trade timing, entry and exit rules, volatility effects, selection criteria, adjustments for sharp rallies and declines, and risk management, just to name a few. Unlike most trading books, this one was written by someone who has devoted years of effort to perfecting and trading the strategies illustrated in this book. That simple fact has driven Benklifa to dissect the complex dynamics of the condor trade into enough detail to fill an entire volume. Trading condors without reading this book is like going to war without a gun.”
—Jeff Augen, author, Trading Options at Expiration
“Too many options books lose clarity in an attempt to explain every strategy for every market condition. Benklifa avoids this pitfall by focusing on one strategy, the iron condor. Benklifa combines his lucid explanation of the iron condor with guidelines of the trading discipline needed to make it successful. The emphasis is upon profit optimization, not profit maximization. Risk and reward are given their due. He does a superb job of reducing the equation to the lowest common denominators—time, price, and implied volatility. The book provides a rock solid foundation for the understanding and application of core trading concepts.”
—Frank Fahey, in the pits for 20 years at the CBOE
Right now, real traders are achieving consistent returns every month, through trades that strictly limit market risk. Michael Hanania Benklifa is one of them. In this book, he shares his secret: iron condor options. Benklifa personally manages millions of dollars in condor options trades each month. Now, drawing on his unsurpassed experience, he shows exactly how to run these trades and earn these returns.
No abstractions or oversimplifications here! Instead, you’ll find detailed, step-by-step instructions…examples based on real market dynamics...insights into the critical nuances that will dramatically impact your trading results. Benklifa shows how to handle rising and falling volatility, changing bid-ask spreads, distorted call parity, and more. You’ll learn how to earn attractive profits from condor options in sideways markets, rising markets, falling markets, every market!
Creating your “zone of profits”
Planning and controlling the source and timing of your profits
Understanding the underlying dynamics of condor trades
Uncovering the crucial details that increase profits and reduce market risk
When to get in–and when to get out
Mastering patience while avoiding greed
Adapting your trade for diverse market environments
Earning consistent profits no matter how the market movesSee all Product Description
Inside This Book(Learn More)
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Top Customer Reviews
as a Neutreul bias.
Most Helpful Customer Reviews on Amazon.com (beta)
While the book does spend some time on options basics, most of the focus in this area is on "the Greeks." The book rapidly moves into how to put on the trade, when to put on the trade, how much credit you should get for it, when to get out of the trade and how to adjust the trade if necessary. It reminds you that having a plan for exiting a trade is often as important as having a plan for making the trade to begin with.
I waited until I put on a few trades with this approach to see if my opinions would change. So far, my trades using this approach have worked out well.
If I had one minor complaint with the book it is that it should be a little more forceful in its admonitions that, in a single position, you are generally risking $2100 to $2200 to have a maximum profit $300-$400, assuming the position were held until it was closed. Since you're not holding until the close, your typical upside in the trade is more like $100-$150. The point is, if the market moves against you quickly with this trade, you can lose your shirt very quickly. That is a low probability event and the author shows how to mitigate these risks, but that doesn't change the fact that you may occasionally suffer a devastating loss (like with a quick drop in the market and a surge in volatility, both of which can work against you simultaneously). Accordingly, if you can't pay careful attention to the market to manage the position, this would not be the book for you.
The author favors trading the SPX, RUT, and NDX mainly for reasons of liquidity and the fact that as European-style options you do not have to worry about exercise prior to expiration date. Interestingly, the back cover stresses the ability to earn consistent returns very month with "surprisingly modest risk," but the author himself states early in the book that this should not be considered to be an income strategy and then he goes on to stress that there are a lot of risks with this strategy. In fact as he explains, those risks make it imperative that the trader keep a watchful eye on both "wings" of the condor so that adjustments can be made as needed. This is definitely not one of those trades that you can put on and then just check every week or so.
Although many traders who use spreads typically like to leave their trades on for as long as possible in the hopes of keeping most, if not all of the amounts that they were credited when the trade was opening, this author actually recommends against holding trades open for this long. He definitely is more in favor of going for singles rather than home runs. For example, he claims that "the exit strategy that works best is to give back almost all of the credit. If you take in an initial 16% credit and keep only 3%, 4% or 5%, you're giving back most of the potential profits. How many trades have you made that can consistently make profits of 3% in a few days regardless of the direction of the market?" I see his point, but if you are someone who has only previously traded options from the long side, be prepared to change your way of thinking.
Those who have been involved in other types of spreads may already be familiar with much of the material found in the book, but those who have not been involved in selling options or in spread trading of any type will find this book interesting. If you read the book and decide that you're really not that interested in this particular strategy or type of trading, you won't have to waste much of your time since the book can be finished in one sitting.
This book also provides many case studies which I was able to replicate on my Think or Swim platform that further reinforces the application of the techniques provided. Following the instructions in this book I was able to turn a 12% profit in my first month of trading. With the day trading method I was able to produce a 18% profit in one day with the Amazon earnings trade that occured on 7.26.2012. This equates to over 40,000 in profits in since I first applied his method on 4/10/2012. I also had the chance to actually speak with the Mr. Benklifa before I took these trades and I must say that I was very impressed with his knowledge in this subject as well as being very down to earth and easy to speak with for a person that manages "much more than 10 million dollars". When the book was written this was the amount of money he had under management which I assume has grown quite more than this by now.
The drawbacks I see in this book are that the illustrations are too small in the digital version of the book and you really need a basic foundation of options to understand and follow the flow of this book. Beginners may find this book a little advanced for their tastes.
I urge you to purchase this book and gain a true understanding of the iron condor which will literally install a ATM machine in your office. I would have easily paid 10 times the cost of this book to obtain the golden nuggets found in this book. There is nothing held back on the part of Michael Benklifa about the way he trades iron condors and this book is for sure a WINNER!!!!
Michael's book teaches how to "go for singles" and then get out of the market. Shoot for smaller returns but compound those over time. You do the math, don't you think you could start a hedge fund if you made 3% every month? You would have people lining up to give you money! So if you take this approach in your own trading account, you can make solid returns. The only problem is, you won't be trading much. According to Michael he is out of the market more than he is in it. This is boring :). So if you want thrills in your trading, don't look here. But if you are looking for much less stress and volatility in your results, this book should help.
Michael does a pretty good job outlining his rules, although a few could be a little more clear but overall, this is a well written book with lots of examples. I will also say that I put on one of his trades the day before the Japan Tsunami and the trade never really went against me. I was out in 7 days with a 7% profit. While this is just one data point, it did give an indication of how this can handle a sudden jump in volatility. Not bad at all. I also did a strategy for those looking for a bit more frequency by trading an earnings play and made 9% in one day. Although I would not recommend this trade if you can't make it small enough not to hurt your account if you are wrong.
Lastly Michael wrote this specifically to help the retail trader like you and me. The money is thus well spent on this book.
Bottom line, this book belongs in your bookshelf if you take your options trading seriously. It is not complex, it is very conservative and can make consistent money. Thanks Michael! Mike from seriousoptions.com