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Flying condor commodity options trading pattern

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02/04/2023| By
Gabor Gabor Legindi
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The flying condor is an exchange traded option trading pattern developed for dynamically changing patterns. It uses 3D logic, i.e. it is built with legs that are offset in time and space. It breaks with the tradition that the PnL pattern taken at market entry is the result at exit, as the initial pattern is modified in a market-following manner depending on the market price change. It is based on the two options patterns short straddle and long strangle (https://en.wikipedia.org/wiki/Strangle_(options)). It opens a sell pattern for the front futures and then more buy patterns for the following futures until the PnL chart starts to resemble a flying bird. The wings start to curve upwards from the preponderance of buys. The pattern may widen or narrow due to the treatment following the market move, hence the name flying condor. The starting point of the strategy is similar to the short iron butterfly pattern, only it uses a minimum of 3 consecutive futures.

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Submitted by2 Apr 2023
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Gabor Legindi
Heliumquant
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  • License: CC BY
  • Review type: Open Review
  • Publication type: Article

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