Iron Condors Traders Cash in $AZO

Most option traders know the power of time when it comes to options.  Options have a fixed time that they expire so time is not favorable to option owners.  A little chunk of the option “decays” away each day until the option gets to it’s intrinsic value.  Most option buyers use some type of method to offset their daily option decay.  There are many types of methods, but one method that we use is the Iron Condor option strategy.  We use this option strategy to take in premium to offset other positions.

The Iron Condor strategy is the combination of two out of the money verticals that want the stock to stay within the two short strikes.  An example of this is one that we just had expire on June 29th in Autozone $(AZO).

In our weekly webinar we discussed the 665-725 Iron Condor with the stock around the $694.59 stock price.  This meant the option traders bought 655 puts and 735 calls and sold the 665 puts and 725 calls.  Our subscribers want the stock to stay between the 665 puts and 725 calls for max profit.

In the chart below you can see where subscribers could have entered the trade to get $1.60 for the Iron Condor option spread.  This results in $160 when we account of the 100 shares of stock that each option controls.

You can also see how the stock sat in between the short strike range until expiration to allow subscribers to collect the full $160 per option spread entered.