Module 4 – Best Ways to Enter and Exit Iron Condors

In Module 4 of the Iron Condor Course, I’ll be talking about how to actually enter iron condor trades in your brokerage account.

When placing an Iron Condor trade, like any trade, execution is important.

Poor execution and slippage will sometimes seem minor on a per trade basis.

Despite this when you aggregate it across all your trades in a year it can easily cost you significant returns and even make a strategy unprofitable.

Slippage and execution become more important when liquidity is less.

For example, the bid ask spread which is set by the market maker can be as little as a penny for a liquid underlying like SPY or SPX.

Conversely it can be multiple dollars wide for illiquid stocks.

As a general rule of thumb, you want to trade as close to the mid-point of the bid ask spread as possible.

Despite this to get filled you will often need to give the market maker a small cut or a little more of the spread.

It is often a good idea to “test the waters” first.

For example, if you are trading 50 contracts, put in your first order for 5 contracts and see where you are able to get filled.

If you are happy with the price, then enter the remaining 45 contracts.

If you are new to trading options focusing execution on the very liquid underlings with tight bid-ask spreads for your Iron Condors will minimize slippage and execution costs.

Furthermore, if you make a mistake, you can easily reverse it without it being too costly.

Most brokers will give you 3 ways to enter an iron condor trade:


Ideally this is the best way to place the trade. Despite this sometimes it can be the hardest method to get filled as you are trying to get filled on 4 legs at once.

The bid-ask spread on this type of order is going to be pretty wide, so you will incur some slippage.

The advantage is that the entire trade is executed at the same time negating the effects of market moves while you are entering your trade


Some trades prefer to enter all 4 legs as individual orders.

This method is easier to get filled at a good price, but you run the risk of the market moving against you when you only have half or one quarter of the position open.

This method leaves you exposed to market movements between the time the first order is filled until all orders are filled.

Generally, when entering orders with this method, you want to have all 4 orders executed fairly quickly once the first order is filled.

It is a good idea to have all 4 orders set up and ready to go, so you just have to adjust your price once that first fill comes through.

Trading this way can be tricky and may be a bit stressful for beginners.


This is my preferred method and is basically a mix between the above 2 methods.

In my account I set up the two trades starting with my prices at or slightly above the mid-point.

From there I slowly bring the price down to the mid-point (or slightly below) over a 5-10 minute period.

Once the first trade is filled, I try and get the next trade filled within about 5 minutes to avoid slippage.

It’s up to you which method you choose as there are advantages and disadvantages to each of them.

Advanced traders can try and time the market buy by legging in, but this means holding a directional exposure for a short period of time which can easily move against you. before entering the neutralizing trades in the hope of achieving a greater profit.

In Module 5, we’ll look at iron condor entry rules.