How do you hedge an iron condor?

The most efficient way to hedge an iron condor is to roll the unchallenged spread in the direction of the underlying stock's price movement. For example, if the underlying stock price has moved higher and is challenging the bear call spread, the original bull put spread could be closed and reopened closer to the current stock price.

How do you adjust an iron condor?

Iron condors can be adjusted by extending the time horizon of the trade or by rolling one of the spreads up or down as the price of the underlying stock moves. Adjusting an iron condor typically brings in more credit, which increases the maximum profit potential, decreases the maximum risk, and widens the break-even points.

How do I adjust my iron condors if a stock is under pressure?

A good rule of thumb with iron condors is to adjust the side that is under pressure when the stock gets to within 3% or if the delta of the short strike touches 25. In this case the short calls are 5% away and the delta is only 15 so we’re happy to leave them where they are. Instead we will roll up the puts from 980-1000 to 1010-1030.