I hope you were able to attend yesterday's live presentation with Dr. Summa. Iron Condors are notorious for devastating a trader's account when the market changes direction or starts moving unrelentingly.
What Dr. Summa did for us yesterday is introduce the concept of dynamic delta hedging. This all goes back to the concept of "trading by the numbers" and is something we spend a lot of time talking about in the Trading Room.
By controlling delta risk it is possible no only to stay in an iron condor trade, but to also stabilize your account equity. What this stabilization does is allow you a graceful exit from the position should it ultimately prove to be untenable.
Where many iron condor traders find themselves in trouble is when the market creeps ever closer to the strike price of one or the other short option. They stay in the trade hoping that the market takes a pause or reverses. While they hope for relief, an unrealized loss builds in their account. As the market continues its encroachment upon that short strike they now hesitate to close the position because that would mean converting what is now a large unrealized loss into an actual loss.
We have all been there. No one likes taking a loss, but it is sometimes necessary. Our focus is on making sure that loss is as small possible. Dynamic delta hedging is one tool we can use when the market moves against us to keep account equity stable, to keep losses in check, and very often to pull a tidy little profit out of what would have otherwise been a costly loss of capital.
I know what you are thinking...
Was this presentation recorded? I will not keep you in suspense any further. Yes, we did record the presentation and it is now available for viewing.
On the video re-play page you will also find links to the PDF download that contains Dr. Summa's slides from his presentation. The video has been reduced in size to serve the demands of our growing audience while reducing bandwidth and storage consumption. This produces a degradation in the quality of the video re-play. Downloading the PDF should allow you to follow along more easily.
I have also posted a link to Dr. Summa's website where you can get more information about his upcoming presentation here in Burbank, CA. On Saturday, January 30th, and Sunday January 31st, Dr. Summa will host small group training sessions. The Saturday session is geared for beginning to intermediate options traders and will prepare you for what's coming the next day. On Sunday, Dr. Summa will lead the group into an exploration of very effective adjustment and defensive tactics.
My plan is to attend both sessions and to be on-hand to assist anyone attending as much as I can. I will also clear my schedule for Saturday evening. Dr. Summa and I will be inviting anyone in attendance to meet us for dinner. We'll probably be going "Dutch," but we will share stories and talk trading right on through the dessert course.
Space is limited for this event, but if you decide to attend I look forward to meeting you and please be sure to let me know you're a member of our community!
Enjoy the video!