A TastyTrader's Journey
Even after rolling or adjusting our trades, we would still want to close the trade when the initial profit amount is reached.
For example, say initial profit target is $0.50 (1/2 of $1).
We rolled for additional $1 credit. Now total credit received is $2. New profit target will be $2 – $0.50 = $1.50
Step 1: Cover The Spread
When the debit spread portion of the trade can be closed for near max profit, the debit spread portion can be sold while holding the additional short option.
Step 2: Roll Out The Extra Short
If the trader wants to extend duration on the position, the short option can be rolled to the next month.
Step 3: Sell Opposing Option Against it
Becomes a strangle
Prefer to collect $0.70 for put and $0.30 for call spread.
Prefer $1 wide strikes.
There is also walkthrough on the different options to manage a Jade Lizard that has gone wrong.
Heard Sosnoff say:
TastyTrade discussed how can iron condors be profitable a while back. This is a refresher. Spotted new info as well! Managing 1 std dev strangles at 50% increases their success rate to a whopping 92%!
One of the ways to deploy Calendars is right before earnings to capitalize on the volatility expansion that will almost always happen nearer to earnings day.
Calendar Spread Earnings Setup involves selling near month before earnings and buying far month after earnings. Otherwise, we follow many of Durational Calendar Spread rules. IVR should be low and Option Volatility between the 2 months which we are selling and buying should not be too wide. Looking at 20%-30% profit.
Heard Sosnoff Say:
Ideally, when adjusting, delta of put should be 1/2 that of call (for strangles).
Liz and Jenny shared the following rules for putting on a durational Calendar Spread:
20 Percent Freedom 