Earnings Iron Condor: Why 44 Days Beats 16 Days
Earnings Iron Condor: 44 Days Vs. 16 Days
Two condors, one earnings date
Two iron condors on the same stock, both placed before earnings, one expiring in 16 days and one in 44. Most traders pick the short one because it decays faster. In this clip from a live Elite Trader call I explain why the longer one is the better trade.
What the crush pays either way
Both positions earn the volatility crush once the numbers are out, since the crush hits the event, whatever the expiry. The 44-day condor collects a larger credit for the same width, so its break-evens sit further from the price and it takes a bigger move to hurt it.
Where the short expiry breaks
With 16 days left, gamma is high. A move through a short strike turns into a large loss quickly, and there is little time to repair anything. The 44-day condor moves more slowly against you, and after the event there are weeks left to roll a side or close for a smaller loss.
Time as the cheapest insurance
Paying a little theta for four extra weeks buys room to be wrong. The clip shows both positions side by side on a real position.
Every Wednesday we run a session like this on a real portfolio. One free lesson a week lands here; the full calls and the archive are part of the Elite Trader Plan.
Education only. Nothing on MacroDozer or The Desk is investment advice.