Top Iron Condor Setups for August 11th (Screener Results)

A short iron condor is an income strategy that aims to profit when a stock stays within a specified range over the course of the trade. The trade is composed of four options with the same expiration:

• A long put far out of the money
• A short put closer to the money
• A long call far out of the money
• A short call closer to the money

The maximum profit is limited to the premium received while the maximum potential loss is also capped. To calculate the maximum loss, take the difference in the strike prices of the long and short options, and subtract the premium received.

Traders should have a neutral outlook on the stock and ideally look to enter when the stock has a high implied volatility rank.

Let’s take a look at Barchart’s Short Iron Condor Screener for August 11th:

As you can see, the scanner shows some interesting Iron Condor trades on stocks such as AMZN, PLTR, AAPL, NVDA and TSLA.

Amazon Iron Condor Example

Let’s look at the first line item – an iron condor on Amazon using the August 28thexpiration.

Using the August 28th expiry, the trade would involve selling the $255 put and buying the $240 put. Then on the calls, selling the $300 call and buying the $315 call.

The price for the condor is $1.40 which means the trader would receive $140 into their account. The maximum risk is $1,360 for a total profit potential of 10.29% with a loss probability of 20.0%.

The profit zone ranges between $253.60 and $301.40. This can be calculated by taking the short strikes and adding or subtracting the premium received.

The Barchart Technical Opinion rating is a 100% Buy with a Strongest short term outlook on maintaining the current direction.

Long term indicators fully support a continuation of the trend.

Amazon is showing an IV Percentile of 30% and an IV Rank of 26.78%. The current level of implied volatility is 30.22% compared to a 52-week high of 50.10% and a low of 22.95%.

Palantir Iron Condor Example

The next Iron Condor we will look at is on the second line using Palantir Technologies also for the August 28th expiration.

This example involves selling the $160 put and buying the $150 put, then selling the $220 call and buying the $230 call.

The maximum profit potential is $135 with maximum risk of $865 and a loss probability of 20.0%. The total profit zone ranges between $158.65 and $221.35.

The Barchart Technical Opinion rating is a 8% Buy with a Average short term outlook on maintaining the current direction.

Relative Strength is above 70%. The market is in overbought territory. Watch for a potential trend reversal.

Palantir is showing an IV Percentile of 26% and an IV Rank of 25.69%. The current level of implied volatility is 49.44% compared to a 52-week high of 74.75% and a low of 40.69%.

Mitigating Risk

Thankfully, iron condors are risk defined trades, so they have some build in risk management. The most the Amazon example can lose is $1,360 while the Palantir condor has risk of $865.

For each trade consider setting a stop loss of 25-30% of the max loss.

Iron condors can also contain early assignment risk, so be mindful of that if the stock breaks through the short strike and it’s getting close to expiry.

Please remember that options are risky, and investors can lose 100% of their investment. This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.