The Option Alpha Podcast 225: 1-Year Review of $3k Monthly Iron Condor Bot
Apr 5, 2023
This discussion dives into the performance of a $3K monthly Iron Condor bot after a year of live trading. It highlights strategies for trading uncorrelated ETFs to minimize risk and explains the mechanics of monthly contracts with specific entry filters. Listeners will learn about the bot's year-to-date results, including its 88.5% win rate and the effects of market volatility on its performance. The conversation also explores potential improvements to enhance profitability and the benefits of automation in trading.
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Diversify With Uncorrelated ETFs
- Scan a small list of uncorrelated ETFs instead of correlated market indexes to diversify risk.
- Trade up to six monthly iron condors around 40 DTE with one contract each to control position sizing.
Keep Cash And Size Spreads Conservatively
- Keep 50% of capital in cash and size spreads so each position risks about $250.
- Use wider wings (e.g., $3) and fewer contracts rather than many narrow spreads to limit assignment risk.
Entry Filters: Deltas, POP, And ROR
- Place short strikes around the 20-delta and set minimum POP and rate-of-return filters (e.g., 60% POP, 25% ROR).
- Use bid-ask filters and trade monthly contracts at least ~40 DTE for liquidity and consistency.