Adjusted Iron Condor

Adjust if: thesis is still valid, you can adjust for credit or small debit, it's your first adjustment, and there's time for adjustment to work. Close if: thesis is broken, can only adjust for large debit, already adjusted multiple times, or better opportunities exist elsewhere.

Rolling the tested side further OTM is the simplest. Close the threatened spread and open a new one with a short strike further from current price. This gives breathing room and is straightforward to execute.

Common triggers: price approaches within 50% of distance to short strike, position delta exceeds ±20-25, or unrealized loss exceeds 50% of max profit. Earlier is generally better than waiting until strike is breached.

No. Adjustments are risk management tools, not profit guarantees. They give the position more room to work, but if the market continues moving against you, even adjusted positions can lose. Adjustments improve odds, not guarantee outcomes.

Track cumulative credits/debits from original entry plus all adjustments. Your profit target should be 50% of this cumulative net. Keep a spreadsheet with dates, actions, credits/debits, and new position structure after each adjustment.

Roll out in time when strikes are still appropriate but you need more runway. Roll to different strikes when current strikes are too close to price. Often combine both: roll to later expiration AND adjust strikes for best result.

Only when confident price won't reverse. If tested side rallied and stabilized, untested side may be very safe. Rolling it closer collects credit to offset tested side losses. But if price reverses, you've tightened your zone and may get whipsawed.

Roll when you want to reposition existing spread. Add spread when you want layered defense or additional credit without closing existing spread. Adding is more aggressive and creates more complex position to manage.

Yes, if you expect price to pin at a specific level. Roll both short strikes to that level. This converts from range-profit to point-profit structure. Best when you have strong conviction on specific price target.

High IV means better roll credits - favor adjusting over closing. Low IV means limited credits - closing may be better than poor adjustment. Also check IV term structure for time rolls - contango helps, backwardation hurts.

Define trigger rules (price, delta, P&L thresholds), adjustment selection rules (what to do for each trigger), and exit rules post-adjustment. Backtest on historical data. Optimize parameters but avoid overfitting. Implement with discipline.

Earlier in cycle (high DTE), gamma is lower - you can be more patient with adjustments. As expiration approaches, gamma increases - delta changes faster, adjustments become more urgent. Consider rolling out to reduce gamma exposure.

Track aggregate Greeks. Prioritize adjustments by size, severity, time remaining, and correlation. Be careful not to adjust multiple correlated positions identically. Consider cross-position hedging. Set adjustment budget to prevent over-trading.

Calculate EV(close) = current P&L (known). Calculate EV(adjust) = sum of probability × outcome for each scenario post-adjustment. If EV(adjust) > EV(close), adjust. This requires estimating probabilities of price scenarios after adjustment.

Check skew: steep put skew means put rolls may have better credits. Check term structure: contango means time rolls get good credits. Check smile: adjust to strikes where wings are relatively overpriced. Use vol surface to optimize adjustment selection.