About Short Iron Condors
A short iron condor is a multiple leg position that combines a bull put credit spread (buy a put and sell a higher strike put) and a bear call credit spread (sell a call and buy a higher strike call) where all strikes are equal distance and have the same expiration.
This position results in a net credit and max profit is realized if the underlying stock settles at or between the two short inside strikes at expiration.
Max risk is realized if the underlying settles below the lower long put or above the upper long call. This strategy has both limited profit and limited risk potential.
Example:
- Long 1 50 P @ .01
- Short 1 70 P @ .06
- Short 1 90 C @ .03
- Long 1 110 C @ .01
For the example above, you receive .05 for the 70/50 bull put spread and receive .02 for the 90/110 bear call spread.
Net credit on this iron condor is .07
Max profit is equal to the credit received .07
Max loss is equal to the difference between the spread's strike prices (strike differential) less the credit received. Here the max loss is 19.93 (20 - .07)
Max Profit
Max profit is incurred when the stock price is equal to or between the two short options at expiration. Max profit is equal to the net credit received (.07)
Max Loss
Max loss takes place if the underlying stock expires below the lower long put or above the higher long call. Take the strike differential minus the credit received (20 - .07 = 19.93)
Break Even Calculations
The upper BE is equal to the lower short call plus the net credit (90.07) and the lower BE is equal to the higher short put minus the net credit (69.93)
Both the profit and risk in this strategy are limited.
The screener results are then initially sorted by ascending "Probability of Loss."
The screener displays probability calculations based on the delayed stock price at the time the strategy is updated. Strikes that have not traded today are excluded from the results.
Options start updating for the new trading day at approximately 9:50a.m. ET. Options information is delayed approximately 25 to 30 minutes, and is updated approximately every 5-minutes through-out the trading day.
Note:Â Expired options are removed from the website Monday - Friday at 7:45pm ET.
Main features of the Screener include:
- Ability to add various filters, with hundreds of different combinations.
- Save a Screener: When you've defined filters that you want to use again, save the screener.
- Share Your Screener: Once you've saved a screener in your Barchart account, you can create a "share link" to send to your friends, associates, or any other interested parties. See details below.
- Load a Saved Screener: Select a previously saved set of Screener filters to view today's results.
- View the Results using Flipcharts: Page through charts of the underlying symbols on the results page.
- Download the Results: Download up to 1000 results to a .csv file. The Download will also pull all of the data fields present on the View you use.
- Screener Emails: This option is available for Barchart Premier Members. When you save a screener, you can opt to receive the top 10, 25, or 50 results via email along with an optional .csv file of the top 1000 results. Emails can be sent at Market Open (9:00am CT), Mid-Day (12:00pm CT), End-of-Day (4:45pm CT), and Overnight (3:00am CT) Monday through Friday.
Note: When selecting the Filter View for your Screener email, a filter must identify a specific search value in order for it to be included in the email.
Filters
Barchart Premier subscribers can add or modify different filters on the screener to find calls on the most favorable stock options.
Reordering Filters
Once filters are added, you may drag and drop them in the SET FILTERS tab to reorder the way they appear on the RESULTS tab (when using the Filters View). Each filter you add has the "Order" icon which is used to reposition it.
Deleting Filters
To remove a filter from your screener, click the checkbox to the left of the filter name, then click the red "Delete" button at the top of the column. You may also select all filters for deletion by clicking the checkbox at the top of the column, which selects ALL filters for deletion. You will be asked to confirm your decision to delete.
So you can focus on the best options, the screener starts by applying these default filters. Filter settings should be adjusted to match your trading requirements.
- Days to Expiration (monthly expirations only) is between 1 and 60 days.
- Security Type is only Stocks.
- The Options Volume for Leg1, Leg2, Leg3 and Leg 4: for US market, must be greater than or equal to 100. For Canadian market, must be greater than or equal to 1.
- Open Interest for Leg1, Leg2, Leg3 and Leg 4: for US market, must be greater than or equal to 500. For Canadian market, must be greater than or equal to 5.
- Ask Price Leg 1 and Leg 4 is greater than 0.05.
- Bid Price Leg 2 and Leg 3 is greater than 0.05.
- Moneyness Leg 2 and Leg 3 is less than or equal to -0.1%
- Net Delta is between -0.10 to 0.10
- Probability of Loss is less than 50%
In addition:
- The stock price must be greater or equal to 1.00.
- The option must not be a "restricted" option. Non-standard or "restricted" options (options quotes marked with an asterisk * after the strike price, and found on an individual symbol's options page) are automatically removed from the screener. A "restricted option" is typically created after spin-offs or mergers, and is not tradeable.
- Strikes that have not traded today are excluded from the results.
Probability Calculation
We take the underlying stock price (l), the target price (b), days to expiration (t) and the implied volatility (v) to calculate probability:
Probability Above = 1-NORMSDIST (LN(b / l) / (v*SQRT (t / 365)))
Probability Below = NORMSDIST (LN (b / l) / (v*SQRT(t / 365)))
b = target price
l = underlying last price
v = implied volatility
t = days to expiration
Short Condor Break Even: Probability of the underlying trading inside of the break even points at expiration.
Short Condor Max Risk: Probability of the underlying expiring below the lowest put strike at expiration or above the highest call strike.
Views
The Results page contains three standard views. You may switch the view using the links at the top of the screener results table. The Main View shows the Volume and Open Interest for each option, while the Dividend & Earnings View can be used to highlight strategies with upcoming dividends and earnings. The Filter view shows you the data contained in the field(s) you've added to the screener.
Main View
- Stock Symbol - the underlying equity. Clicking on the symbol will take you to the current quote page.
- Price~ - the last price of the underlying symbol
- Exp Date - the expiration date (and days to expiration) of the option
- Leg1 Strike (Long) - the strike price of the leg1 option
- Leg1 Ask - the ask price of the leg1 option
- Leg2 Strike (Short) - the strike price of the leg2 option
- Leg2 Bid - the bid price of the leg2 option
- Leg 3 Strike (Short) - the strike price of the leg3 option
- Leg3 Bid - the bid price of the leg3 option
- Leg4 Strike (Long) - the strike price of the leg4 option
- Leg4 Ask - the ask price of the leg4 option
- BE+ - Upper Break Even% = (Upper Break Even - Stock Price) / Stock Price * 100.0
- BE- - the lower limit necessary for the strategy to break even. (Leg2 Strike - Net Credit)
- Max Profit - Maximum Profit = Net Credit which is the premium received to enter the trade
- Max Loss - Maximum Loss = Outer Strike Differential minus Net Credit (Max Profit)
- Risk/Reward Ratio - Risk/Reward Ratio = The Max Loss to Max Profit ratio.
- IV Rank - The ATM average implied volatility relative to the highest and lowest values over the past 1-year. If IV Rank is 100% this means the IV is at its highest level over the past 1-year.
- Probability of Loss - the likelihood of the strategy losing money.
Dividend & Earnings View
- Stock Symbol - the underlying asset. Clicking on the symbol will take you to the current quote page.
- Name - the name of the underlying asset.
- Price~ - the last price of the underlying symbol
- Latest Earnings - the next reported earnings date, or the latest earnings date as reported by the company (if no future date has been released)
- Released - the timing of the earnings report release
- Last Dividend Date - the ex-dividend date on which the most recent dividend was paid
- Dividend - the last dividend paid
- Dividend(a) - the trailing annual dividend amount paid
- Dividend Yield(a)Â - the dividend yield based on the annual dividend paid over the past year
- Dividend Date - The next ex-dividend, or the latest ex-dividend date is no future date has been released.
Share Screener
Once you save a screener to your account, you may share either the details of the screener (including all your filters) or just the results of your screener with anyone you send the link to.
First, save your screener, making sure the view and sort you select in the saved screener modal is the one you want to share. You may share any of our "Standard" views (Main, Technical, Performance, etc.) or the Filter view. Shared screeners saved using one of your Custom views will only share the Filter view, as the Custom view is specific to your Barchart account.
Next, click the "share" link found on the Results tab. You will be asked what to share:
- Share Screener with Filters - the people you share the link with will be able to save the same screener in their Barchart account and view/modify the filters you used.
- Only Share the Results - the people you share the link with will not be able to save this screener in their Barchart account or view the filters you used to create the screener. This option would be used if you wish to keep your screener filters proprietary.
The share link is copied to your clipboard, and you are now free to send that link to anyone. Any further changes you save to your screener are automatically updated on the "share link" you initially generated.
Furthermore, if the end-user bookmarks the shared link (regardless of whether filters were shared or not) they will always see new results each time they open the link.
