Setting up a "capped" risk reversal

We have been trading a few risk reversal in the room, well at least our own variation on the general risk reversal and I know that some of you are having trouble constructing the order with your retail software.

The easiest way to do this is if your software allows you to enter the legs one by one (like IB for instance). However if you are using something that has predefined templates you won't be able to find them on the list. To get around that limitation just pick an "iron condor" and change the strikes of the puts and calls to match the ones on the trade notifications.

When opening the position make sure that you are "buying" it. Because of the way the trades are set up, you will get paid when you buy it (you receive a credit).

Leo Valencia hosts the Gamma Optimizer options service at ElliottWaveTrader.net.