Iron Condor Trading Strategies Quiz

What is the primary goal of using an iron condor strategy around earnings reports?

• To capture dividends

• To benefit from volatility crush

• To hedge against market downturns

• To maximize long-term capital gains

Which component of the iron condor strategy helps protect against potential losses?

• At-the-money straddle

• Short options

• Long options

• Market Maker Move

What is the significance of implied volatility in selecting expirations for iron condor trades?

• It shows the stock's trading volume

• It determines the stock's dividend yield

• It indicates the stock's historical price

• It provides an idea of expected price movement

In the Cisco trade, what was the expected price range for the stock to achieve maximum profit?

• $50 to $55

• $49 to $56

• $52 to $57

• $51 to $54

What was the theoretical maximum loss for the Copa Holdings trade?

• $180

• $65

• $450

• $35

Why did the trader decide to close the Copa position after earnings?

• To avoid gamma risk

• To capture dividends

• To increase long-term gains

• To benefit from a stock split

What was the outcome of the Sociedad Quimica trade after earnings?

• No change in position

• A large loss

• A small loss

• A significant profit

What is a key takeaway regarding the management of trades?

• Weigh potential gains against time and risk

• Avoid using any trading tools

• Monitor trades constantly for potential gains

• Always hold trades until expiration

What is the importance of having a plan for trades that don't go as expected?

• To avoid paying commissions

• To minimize emotional decision-making

• To ensure maximum profit

• To guarantee a win

What is a major risk when much of the extrinsic value is gone in options trading?

• Dividend risk

• Interest rate risk

• Liquidity risk

• Gamma risk