Analyzing Options Trading Strategies: Strangle, Calendar, and Short Condor Performance

Are you curious about the real-world performance of various options trading strategies? In this insightful video, Morris from San Jose Options provides a detailed analysis of three popular strategies: the strangle, calendar spread, and short condor.

Last week’s class served as a foundation for this week’s examination. Morris begins by recapping the previous week’s performance, highlighting the losses incurred by the strangle strategy, the significant profits from the calendar spread, and the unexpected success of the short condor despite its negative Theta position.

The discussion delves into the impact of market movements and volatility changes on each strategy’s performance. Despite a modest market uptick and a slight increase in volatility, the short strangle strategy faces significant losses, demonstrating the inherent risks associated with this approach.

Conversely, the calendar spread maintains its profitability from the previous week, showcasing its resilience to market fluctuations. However, it’s the short condor strategy that steals the spotlight, with a remarkable 33% return over just two weeks. Morris emphasizes the often-overlooked potential of this strategy, despite its negative Theta position, likening Theta to a mirage that may deter traders from exploring lucrative opportunities.

As the video concludes, Morris prompts viewers to consider their next steps with these strategies. Should one scale down, adjust, or exit entirely? The interactive nature of this analysis encourages audience engagement, inviting viewers to share their insights and strategies in the comments section.

In summary, Morris’s comprehensive examination sheds light on the practical performance of different options trading strategies, offering valuable insights for both novice and experienced traders alike. Join the conversation, share your thoughts, and stay tuned for more illuminating discussions on options trading strategies.