Building a Position

Below are the building blocks for a two trades; the Condor and the RS+. Positions can be built through multiple transactions or they can be initiated as a completed spread. Starting with just the long option allows for the fastest Delta Hedge towards a zero cost position because it takes the greatest Delta risk at trade entry.

The Condor

The 30 Delta Call

The 30 Delta Vertical Call

The 8 Delta Condor

The 11 Delta Condor

The RS+

1

The Ratio Spread plus a long Call in a later expiry

This RS+ position can be viewed through another lens. This helps someone who is new to this trade structure see the connection between the RS+ and the Condor.

As with the Condor, this position can be adjusted to match the chart analysis. Scroll back up to the 11 Delta Condor. That position is preferred if price has already rallied and has reached important resistance either from the 8 SMA bands which have rolled over or perhaps at a prior important high, low or HB. With either position I could start with just the long Call on a very bullish chart setup. Assuming price follows thru higher I could then, in sequence, sell a further OTM Call to create a Vertical spread, then sell a further OTM Credit spread to create a Condor and finally sell additional lots of the Credit spread to create an Unbalanced Condor. That final trade should happen at the point on the chart where it appears the uptrend may be reversing.