Placed the condor with about 52 days till expiration, used .8 delta for the short strikes and plan is to stay in the trade for the full credit. Protective stop loss is at 1.5x the cashflow.
I've studied this strategy for the past 5 years and found it to yield 75% success. The failure happen when price starts to linger outside of the volatility cone. his will serve as my "alert" signal for potential problem with the trade.
Probabilities:Bellow is the historical deviation study. As you can see, with 33 trading days to go, this position has a 94% historical probability of expiring profitable. TOS gives me 83.4% implied probability of expiring profitable.
Volatility Cone & Dashboard:I've decided to play a lot more attention to the volatility cone, thus I made it a bigger portion of my dashboard. The other indicators are still there.
Contingent orders:
I'm using the short deltas to determine the approx. stop-loss point. This makes my day-to-day management a lot easier and I don't have to guess where Volatility will be the next morning. Once you tie the stop with the delta of your short strike, the delta will oscilate with the volatility changes. Close trade if PUT delta is at or bellow -28 or CALL delta at or above 30
I'm using the short deltas to determine the approx. stop-loss point. This makes my day-to-day management a lot easier and I don't have to guess where Volatility will be the next morning. Once you tie the stop with the delta of your short strike, the delta will oscilate with the volatility changes. Close trade if PUT delta is at or bellow -28 or CALL delta at or above 30
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