Iron Right
June 11th, 2009
Iron Right
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Good strategy: Iron condor right before earnings?
Would it be a good strategy to open an iron condor right before an earnings release, to take advantage of the drop in premium after the release? This way, whether the price goes up or down upon the announcement, the position is hedged equally.
I know that you would have to make sure the short strike prices are far enough away from the current price to avoid them becoming in-the-money, in case the price jumps/drops significantly.
Selling iron condors right before earnings is certainly a reasonable strategy, but be careful about going out too far. If the options get too cheap the bid-ask spread will be too big a percentage of your potential profits.
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