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The Joys of Income Trading!

What is income Trading? I define Income Trading as trading that utilizes strategies that have positive theta. For example, in an Iron Condor Trade, you sell an OTM call credit spread and an OTM put credit Spread. It is a positive theta trade because you are selling more extrinsic value in your short options than you are buying with your long options. How Do You Get Joy from Your Income Trading? I don’t have to try and pick market direction every day or week. I rely on repeatable trades that I can do regardless of market direction that rely on risk management and not reading tea leafs! An example of what I mean can be illustrated with an Iron Condor Strategy this week. For illustration purposes, I will assume I put on a delta neutral Iron Condor on Wednesday afternoon, right before 2 big up days Thursday and Friday. The trade would be in the June expiration, put on May 6 at end of day with SPX at $2080. The trade would be to sell one 2175 call and buy one 2185 call. In the puts, buy one 1955 put and sell one 1965 put. This is an Iron Condor trade that was trading at $2.35 credit […]