1 TRADING COURSE – SESSION 5 © Copyright Options Trading IQ. All Rights reserved.

2 DISCLAIMER Any information contained in this presentation is for educational purposes only. Neither IQ Financial Services, LLC or Gavin McMaster are licensed financial advisors, registered investment advisors, or registered broker dealers. Neither do they provide investment advice, financial advice or make investment recommendations and they are not in the business of transacting trades. Nothing in this communication constitutes a solicitation, recommendation, promotion, endorsement or offer to buy or sell by IQ Financial Services, LLC or Gavin McMaster of any particular security, transaction or investment. Any trades and / or results covered in this presentation may or may not be live trades. All trades and trading results are believed to be accurately presented. However, since the trades may not have been executed in the market, the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Therefore there can be no guarantee of accuracy or completeness. The risk of loss in trading securities and options in particular can be substantial. Customers must consider all relevant risk factors, including their own personal financial circumstances, before making any financial transaction. Options involve risk and are not suitable for all investors. See the Options Disclosure Document: Characteristics and Risks of Standardized Options, available from

3 © Copyright Options Trading IQ. All Rights reserved. OUTLINE Market UpdatePosition Update Condor AdjustmentsWeekly V Monthly CondorsGeneral Condor Discussion

4 © Copyright Options Trading IQ. All Rights reserved. MARKET UPDATE Dow down 290 Indexes Stuck in No Man’s LandPretty Close to Overbought on RUT - BBMixed Signals

CONDOR ADJUSTMENTS

ROLL UP PUTS

ADDING CONTRACTS TO SAFE SIDE

ADD A DEBIT SPREAD

ADD A LARGER DEBIT SPREAD

ADD A LONG OPTION IN NEXT EXPIRY

ADD A LONG OPTION PART 2

ADD A CALENDAR SPREAD

ADD A BUTTERFLY SPREAD

REPOSITION ENTIRE CONDOR

29 © Copyright Options Trading IQ. All Rights reserved. TYPICAL IRON CONDOR Sell 10 Put Spreads for around $1.00Sell 10 Call Spread for around $1.00 Total Credit = $2.00 or $2,000

30 © Copyright Options Trading IQ. All Rights reserved. AS THE MARKET MOVES UP Put Spread Now $0.30Call Spread $3.00. An increase of 200%. Total Spread = $3.30Total Loss To Date = $1.30 or $1,300

31 © Copyright Options Trading IQ. All Rights reserved. ADJUSTING THE CALLS Buy Call Spread for $3.00 Now We Have A Loss of $2.00 Just on the Calls Roll Out To Higher StrikesReceive $2.00 for the New Call Spread

32 © Copyright Options Trading IQ. All Rights reserved. AT EXPIRY If All Goes Well the Initial Put Spread and New Call Spread Expire Worthless Profit on Puts = $1.00 or $1,000 Profit on Calls = $0TOTAL Profit = $1.00 or $1,000

33 © Copyright Options Trading IQ. All Rights reserved. ADDING SIZE WHEN ROLLING Started With 10 Contracts. Add Another 5 When Rolling Loss on Initial Call Spread: $2.00 x 10 = $2,000 Credit Received for New Call Spread: $2.00 x 15 = $3,000

34 © Copyright Options Trading IQ. All Rights reserved. AT EXPIRY If All Goes Well the Initial Put Spread and New Call Spread Expire Worthless Profit on Puts = $1.00 or $1,000 Profit on Calls = $1.00 or $1,000TOTAL Profit = $2.00 or $2,000

35 © Copyright Options Trading IQ. All Rights reserved. THE GREEKS Adding Size Is Fine, Provided You Stick To The Risk Parameters Keep An Eye On Delta Dollars and Delta / Theta Ratio Can Also Sell Some Extra Put Spreads to Bring Delta Back In Line

36 © Copyright Options Trading IQ. All Rights reserved. GREEK RATIOS These Are Guidelines, Not Strict Rules Keep Delta / Theta Less Than Roughly +/- 20% Keep Vega / Theta Less Than Roughly 400%

37 © Copyright Options Trading IQ. All Rights reserved. WEEKLY CONDOR Ratios Look Good, Right?

38 © Copyright Options Trading IQ. All Rights reserved.

39 © Copyright Options Trading IQ. All Rights reserved. MONTHLY CONDOR Notice the Gamma? Look at the Ratios

40 © Copyright Options Trading IQ. All Rights reserved. WEEKLY V MONTHLY CONDORS You Do Not Need To React As Quickly With Monthly Condors Ratios on Weekly’s Can Be Deceiving Can Be a Bit More Flexible With Longer Term Trades

41 © Copyright Options Trading IQ. All Rights reserved. 80 DAY CONDOR Different Strokes For Different Folks Ratio Guidelines Will Be Significantly Different Longer Term = Much Higher Vega, Much Lower Theta

43 © Copyright Options Trading IQ. All Rights reserved. 80 DAY CONDOR Delta Is Basically Flat, But It’s 25% of Theta Vega / Theta Is 10x

44 THANK YOU! © Copyright Options Trading IQ. All Rights reserved.