john4419 3:19 am on Monday, September 24, 2018

$MamaCash………Lophirs Trying to get my…

$MamaCash………Lophirs

Trying to get my head around these and would appreciate if you could explain a couple of points!
Are these similar to long condor spreads but opened with a credit?
Assume max profit is the credit received, if not how is the target profit calculated?

I followed your UNH trade for 2.25 (only one as test)

MamaCash 8:05 am on Tuesday, September 25, 2018

Hello @john4419. Lophirs are not long condors imo. A typical lophir is long one put debit spread (40/22 or 37/20 deltas) and short two put credit spreads (30/15 or 30/10). It is referred to as ratio put spread by some. Max profit and credit received are not the same thing on these trades. Max profit is achieved when price aligns with the profit peak on the risk graph at expiration. The probability of getting max profit is very low. Instead, we focus on credit received to calculate target profit. If you received $1 credit and have a 70% profit target, you close the trade .30.

Here’s one of my original posts when Sue and I first introduced lophirs to Options Bistro.
https://optionsbistro.com/2018/08/27/sso-tqqq-new-trades/

Hope these explanations help. Keep asking questions if my explanations don’t make sense. Also, you might want to avoid these trades or trade small if they don’t make sense. It’s hard to manage trades unless you understand structure, management strategy, and exit strategy. Of course, you know that but can’t help myself from stating the obvious. Best to you!
- john4419 10:22 am on Tuesday, September 25, 2018
  
  MamaCash
  
  Very much appreciated, glad I only opened one. Need to get to grips with the concept before moving forward. Once again thank you for all your help.