13/3[Miser] 📈1 to 1.5% from selling Apple options with Iron condor 4 leg options

Iron Condor is a popular options trading strategy that involves selling a combination of a bull put spread and a bear call spread to profit from a stable stock price. In this project, we will discuss how to use the Iron Condor strategy for Apple stock (AAPL), with a stock price range of $140 to $150 and a monthly earning target of 1% to 2%.

First, let's understand the basic components of the Iron Condor strategy. An Iron Condor is a four-leg options trade that consists of two credit spreads, one on the call side and one on the put side. The strategy is designed to profit from a range-bound market, where the underlying stock remains within a specific price range.

The credit spread is created by selling a call or put option with a higher strike price and buying a call or put option with a lower strike price. The difference between the premium received from selling the option and the premium paid for buying the option is the net credit received, which is the maximum profit potential.

For an Iron Condor, we will sell an out-of-the-money (OTM) put spread and an out-of-the-money (OTM) call spread, with the same expiration date. The strike prices of the options will be chosen based on the expected stock price range. In our case, we will choose strike prices that are close to $140 and $150, respectively.

Here's an example of an Iron Condor for Apple stock, with a stock price range of $140 to $150:

Sell AAPL Apr 16 2023 $140 put for $2.50

Buy AAPL Apr 16 2023 $135 put for $1.00

Net credit received: $1.50

Sell AAPL Apr 16 2023 $150 call for $1.50

Buy AAPL Apr 16 2023 $155 call for $0.50

Net credit received: $1.00

Total net credit received: $2.50

In this example, we sold a $140 put and a $150 call, and bought a $135 put and a $155 call, creating an Iron Condor with a $10-wide range. The net credit received is $2.50, which is the maximum profit potential for the trade. The breakeven points for this trade are $137.50 and $152.50, which are the strike prices of the options minus the net credit received. If if ranges between above 137.50 and below 152.50 u can have a max profit of 2.50.

The risk in this trade is limited to the difference between the strike prices of the options in each spread, minus the net credit received. In our example, the maximum risk is $7.50 ($5 for the put spread and $2.50 for the call spread).

To manage this trade, we need to monitor the stock price movement and adjust our positions if necessary. If the stock price stays within our expected range, we can let the options expire and keep the full net credit received as profit. However, if the stock price moves outside of our range, we may need to adjust our positions to limit our losses.

In conclusion, an Iron Condor is a popular options trading strategy that can be used to profit from a stable stock price. By selling out-of-the-money put and call spreads, we can create a range-bound trade with a limited risk and a maximum profit potential. With a stock price range of $140 to $150 and a monthly earning target of 1% to 2%, an Iron Condor can be an effective strategy for trading Apple stock.

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