I initially created a short iron condor strategy in Nifty when it was trading at 24,200, with breakeven points at 23,970-24,480. However, when Nifty moved above my range to 24,520, I adjusted the position by squaring off the put side. Now, my strategy has turned into a long iron condor. Can someone explain what happened?
(I am attaching the screenshot for the same, in the left column in the screenshot the strikes with red mark are the ones which I exited and initiated new ones)
converted short iron condor into long iron condor
byu/Walker491 inoptions
Posted by Walker491
3 Comments
You’re using wack language and it’s confusing
You’re title says all you need to know
The graph shows you all you need to know
From there as long as the numbers make sense and feel good to you. That’s all you need to know.
The long/short iron condor terminology is ambiguous. Some people think the “long” iron condor should be the one that results in a net debit. Others believe “long” should match the long call or put condor payoffs despite receiving a net credit. I’d recommend just using “iron condor” for the credit trade and “reverse iron condor” for the debit. I know it’s pedantic, but it makes it easier to communicate.
Looks like you didn’t actually close* the put side. If you truly started with what you are describing as a short IC, the way to close the put side would have been to buy back the short put and sell the long put. You appear to have sold two puts and a call, and bought two puts and a call all at different strikes than the ones you sold.
*”Square off” being used to mean to close a position appears to be an Indianism. In American and British English, “to square off” means “to prepare to fight.”