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Iron Trader Series
Iron Trader uses a 'double dipping' option strategy to help investors generate monthly income from the 85% of the time that the market is range-bound.
- 2 ways to profit on each trade
- Profit from a directionless market
- Iron Condors and Iron Butterflies
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The Secret to Generating Monthly Income For Life
We are not talking about buy/writes or naked put selling. Those are both solid income generating strategies, but they only let you profit once. And they put a considerable amount of capital at risk.
We are talking about a clever little strategy that lets you ‘double-dip’ by profiting twice from the same option strategy. Best of all, you don’t need a fortune to execute it and your risk is strictly limited.
The Best Way to Profit from a Directionless Market
It’s no secret that volatile markets mean big gains for option buyers. When stocks move dramatically in either direction, you can grab triple-digit gains left and right simply by buying puts and calls.
The problem is, markets only trend about 15% of the time. The rest of the time they are consolidating or mean reverting.
So if you’re relying only on strategies that work best in highly volatile markets, you can get stuck high and dry when volatility drops and the market starts wandering around like a lost sheep.
That's the perfect set up to profit from this ‘double dipping’ option strategy.
Fortify Your Income With Iron
The secret is this ‘double dipping’ trading strategy that turns directionless markets into virtual cash machines.
This ‘double dipping’ option trading strategy is commonly called iron condors or iron butterflies – hence the name Iron Trader. And it gives you two ways to profit from every trade.
An iron condor or an iron butterfly is simply a combination of two different credit spreads – a bullish put spread and a bearish call spread.
Now you may already be familiar with credit spreads. We’ve been trading them very successfully for more than 15 years in our Wealthbuilder service.
To initiate a credit spread, you simply SELL a higher priced option and then turn around and BUY a lower priced option. The difference between the two option prices is the ‘credit’. And this credit is deposited in your account immediately.
Because an iron condor or an iron butterfly is made up of two separate credit spreads, you get two sources of income with every trade.
Together, the strike prices of these two credit spreads form a sort of ‘landing strip’ for your stock.
As long as your stock price ‘lands’ within the boundaries of the two spreads at expiration, you keep all the cash you received upon placing the trades.
It’s as simple as that.
Now don’t worry if you’ve never traded credit spreads or iron condors or iron butterflies. As a Schaeffer’s Iron Trader subscriber, you’ll receive detailed step-by-step instructions on how to place every trade.
Nothing is left to chance. You can read the directions verbatim to your broker if you wish. And you’ll always know your potential risk and your total income potential per trade.
With your Schaeffer's Iron Trader subscription, you will benefit from the following:
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Generate a steady stream of income with targeted iron condor and iron butterfly recommendations.
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Get an average of 2 - 4 real-time iron condor and/or iron butterfly recommendations a month.
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Target profits will range from +50% to +100% or more based on risk-adjusted margin.
- And with each trade we'll issue a commentary the same day that outlines the drivers supporting the trade.
- Short holding periods of less than 1 week or up to 2 months.
- Ideal for a directionless market - that's because with iron condors and butterflies, you're not counting on volatility to profit, you're actually betting against volatility.
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Schaeffer's Alert Service Command Center: View your Schaeffer's Iron Trader along with any other Alert Services all in one location. See your open positions, trade status and much more.
The Secret to Generating Monthly Income With
Much Less Cash At Risk
Iron condors and iron butterflies let you generate steady income month after month with far less cash at risk.
Let us show you what we mean...
When most investors think of generating income, they think of strategies like buy/writes and selling naked puts.
Now these are perfectly solid strategies and they have their place in any options trading portfolio.
But they also require considerably more cash to initiate and this cash is at risk.
How We Find Stagnant Stocks
Having spent most of your trading career looking for break out stocks, it may seem counter intuitive to look for stagnant stocks.
Given the market is only trending 15% of the time and consolidating 85% of the time, finding range-bound stocks is a whole lot easier!
One way we find stagnant stocks is to look for stocks with large amounts of option open interest. Particularly around nice round numbers.
Thanks to a phenomenon known as ‘stock pinning’ these stocks are likely to trade in a very tight range close to expiration.
Stock pinning is when market makers and those holding options that are nearing expiration unintentionally force a stock to close at a certain price by placing massive orders to buy and sell the options and the underlying stock.
Because there is so much money riding on the options relative to what happens on the stock, the option activity often ends up moving the stock price and causing it to gravitate to the option strike with the high open interest.
According to one expert quoted in The Wall Street Journal, “Any time there’s a big options trade, the market makers’ hedging is going to impact the stock price.”
By spotting these situations ahead of time, you can turn these pinned stocks into a steady stream of income with iron condors and iron butterflies.
This strategy is perfect for a directionless market. That’s because with iron condors and butterflies, you’re not counting on volatility to profit, you’re actually betting against volatility.
In fact, iron condors and iron butterflies are the perfect complement to buying options. That’s because they work best when volatility is low whereas option buyers profit most when volatility is high.
So, if you want to diversify your option trading approach and add some much needed income to your coffers, why not check out this strategy for yourself?
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