1. TRADING COURSE – SESSION 5
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2. DISCLAIMER
Any information contained in this presentation is for educational purposes only. Neither IQ Financial Services, LLC or Gavin McMaster are licensed financial advisors, registered investment advisors, or registered broker dealers. Neither do they provide investment advice, financial advice or make investment recommendations and they are not in the business of transacting trades. Nothing in this communication constitutes a solicitation, recommendation, promotion, endorsement or offer to buy or sell by IQ Financial Services, LLC or Gavin McMaster of any particular security, transaction or investment.
Any trades and / or results covered in this presentation may or may not be live trades.
All trades and trading results are believed to be accurately presented. However, since the trades may not have been executed in the market, the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Therefore there can be no guarantee of accuracy or completeness.
No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown.
The risk of loss in trading securities and options in particular can be substantial. Customers must consider all relevant risk factors, including their own personal financial circumstances, before making any financial transaction. Options involve risk and are not suitable for all investors. See the Options Disclosure Document: Characteristics and Risks of Standardized Options, available from
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3. OUTLINE Position Update Adjusting Based On Spread Values
The Greeks and Greek Ratios
Weekly Condor V Monthly Condor
Condor Adjustments 3
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4. BEARISH BUTTERFLY Back to Flat P&L
Exiting in week 1 would have been the right call
August 8th we exit no matter what 4
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5. BEARISH BUTTERFLY 5
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6. BEARISH BUTTERFLY 6

7. IRON TRAPDOOR Not a great time to enter with Vol so low
Not much margin for error either side 7
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8. IRON TRAPDOOR 8

9. IRON TRAPDOOR 9

10. IRON TRAPDOOR 10

11. IRON TRAPDOOR 11

12. COMBINED POSITION 12

13. 13

14. TYPICAL IRON CONDOR Sell 10 Put Spreads for around $1.00
Sell 10 Call Spread for around $1.00
Total Credit = $2.00 or $2,000 14
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15. AS THE MARKET MOVES UP Put Spread Now $0.30
Call Spread $3.00. An increase of 200%.
Total Spread = $3.30
Total Loss To Date = $1.30 or $1,300 15
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16. ADJUSTING THE CALLS Buy Call Spread for $3.00
Now We Have A Loss of $2.00 Just on the Calls
Roll Out To Higher Strikes
Receive $2.00 for the New Call Spread 16
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17. AT EXPIRY
If All Goes Well the Initial Put Spread and New Call Spread Expire Worthless
Profit on Puts = $1.00 or $1,000
Profit on Calls = $0
TOTAL Profit = $1.00 or $1,000 17
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18. ADDING SIZE WHEN ROLLING
Started With 10 Contracts. Add Another 5 When Rolling
Loss on Initial Call Spread: $2.00 x 10 = $2,000
Credit Received for New Call Spread: $2.00 x 15 = $3,000 18
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19. AT EXPIRY
If All Goes Well the Initial Put Spread and New Call Spread Expire Worthless
Profit on Puts = $1.00 or $1,000
Profit on Calls = $1.00 or $1,000
TOTAL Profit = $2.00 or $2,000 19
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20. THE GREEKS
Adding Size Is Fine, Provided You Stick To The Risk Parameters
Keep An Eye On Delta Dollars and Delta / Theta Ratio
Can Also Sell Some Extra Put Spreads to Bring Delta Back In Line 20
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21. GREEK RATIOS These Are Guidelines, Not Strict Rules
Keep Delta / Theta Less Than Roughly +/- 20%
Keep Vega / Theta Less Than Roughly 400% 21
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22. WEEKLY CONDOR Ratios Look Good, Right? 22
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23. 23
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24. MONTHLY CONDOR Look at the Ratios Notice the Gamma? 24
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25. WEEKLY V MONTHLY CONDORS
You Do Not Need To React As Quickly With Monthly Condors
Ratios on Weekly’s Can Be Deceiving
Can Be a Bit More Flexible With Longer Term Trades 25
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26. 80 DAY CONDOR Different Strokes For Different Folks
Ratio Guidelines Will Be Significantly Different
Longer Term = Much Higher Vega, Much Lower Theta 26
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27. 27

28. Delta Is Basically Flat, But It’s 25% of Theta
80 DAY CONDOR
Delta Is Basically Flat, But It’s 25% of Theta
Vega / Theta Is 10x 28
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29. CONDOR ADJUSTMENTS 29

30. ROLL UP PUTS 30

31. ADDING CONTRACTS TO SAFE SIDE31

32. 32

33. ADD A DEBIT SPREAD 33

34. 34

35. ADD A LARGER DEBIT SPREAD35

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37. ADD A LONG OPTION IN NEXT EXPIRY37

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39. ADD A LONG OPTION PART 2 39

40. 40

41. ADD A CALENDAR SPREAD 41

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43. ADD A BUTTERFLY SPREAD 43

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45. REPOSITION ENTIRE CONDOR45

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49. THANK YOU! www.optionstradingiq.com
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