Weekly Iron Condor

Minimum ~$5,000-10,000 is recommended. With $5 wide wings, each IC requires ~$500 margin. You want enough capital to trade 2-3 positions while keeping each below 5% of portfolio. Smaller accounts can use $3 wings but have less room for error.

Start with SPY. It has the tightest bid-ask spreads, most liquidity, and is the most forgiving for beginners. Once comfortable with SPY weekly ICs, you can expand to QQQ or IWM for more premium.

You can, but it's not recommended. Friday (expiration day) has extreme gamma risk where small moves can cause large P&L swings. Better to close Thursday to avoid this risk. Exception: if position is at 80%+ profit Thursday, letting the last few cents expire can be okay.

If using SPY options, you could be assigned stock if puts go ITM or have to deliver stock if calls go ITM. This is why most traders close before expiration. If using SPX, it's cash-settled - you just pay/receive the cash difference at settlement.

Start with 1-2 positions while learning. As you gain experience, 3-5 weekly ICs is manageable. More than that becomes difficult to monitor properly. Remember that correlated positions (multiple index ICs) effectively act as one larger position.

Monday is generally preferred. You capture the full week's decay and have more time for positions to work. However, if Monday is volatile or uncertain, waiting until Tuesday is fine. Avoid entering Thursday/Friday for same-week expiration.

Options: (1) Close entire IC immediately if uncomfortable, (2) Close just the threatened side and let the winning side run, (3) Tight monitor with hard stop in place. In weekly timeframes, there's little time for recovery, so closing is often the best choice.

Generally, favor probability over premium in weekly ICs. The compressed timeframe means less margin for error. Higher probability (12-14 delta) with consistent execution beats aggressive positioning (18-20 delta) that gets tested more often.

If a known event (economic data, company announcement) falls within your trade period, either: (1) Skip that underlying for the week, (2) Widen strikes significantly to account for event move, or (3) Reduce size. Don't ignore events - they're the primary cause of weekly IC losses.

Adjust based on conditions. Use delta-based or expected move-based selection that naturally adapts to current IV. A fixed strike distance (like 'always $15 OTM') ignores IV changes and will be too tight in high IV and too wide in low IV.

The optimal balance depends on your risk tolerance and market view. Tighter strikes maximize theta but increase gamma risk. Calculate your theta/gamma ratio and breakeven move (sqrt(2×theta/gamma)). Target strikes where this breakeven exceeds your expected weekly move estimate.

Track aggregate gamma across all positions. Set a maximum portfolio gamma limit (e.g., -$500 per 1% move). When approaching limits, avoid adding new ICs. Consider gamma from different underlyings as partially correlated. Some traders add long gamma positions as hedges when portfolio gamma gets extreme.

Kelly = (Win%/1 - Loss%/Win:Loss ratio). For typical weekly IC with 75% win rate and 2:1 loss:win ratio, Kelly ≈ 62.5%. Use half-Kelly (~30%) for safety. Apply to your capital to determine max allocation to weekly IC strategy, then divide by number of planned positions.

Track the realized volatility over prior weeks against current IV. When IV significantly exceeds recent RV, weekly ICs have enhanced edge. Conversely, when RV is running higher than IV, reduce or skip. This systematic tracking improves trade selection over pure delta-based entry.

0DTE volume now dominates Friday trading and can cause amplified intraday swings. This affects Friday weekly IC outcomes through unpredictable delta hedging flows. The Thursday exit rule becomes even more important. Some traders now exit Wednesday for maximum safety.