Great video! Thanks for sharing. One thing bothers me a lot. At 4:29 you say that we might be in a very big loss, it looks like it contradicts the max loss I see when I confirm and send the order. Can you elaborate on this?
The risk profile of any strategy doesn’t take into account the potential risk of assignment. It only shows the value of the trade would be at certain price points on expiration. So, in the case of the iron condor, if the price was to rise above the short call, but below the long call, you may be assigned. This means you would have to deliver 100 shares of the underlying stock per every short call contract. If you didn’t deliver those shares, your account would then be charged the shares and you would be short 100 shares per contract. If the stock rallies while you’re short those shares, you would start to see losses in your account. Theoretically, a stock could rally to infinity, which would result in infinite losses. You can learn more about short selling stock from this video. ^RC: Short Selling: Can You Profit from Falling Stocks? ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-FnbyKiLAIV4.html
