Many traders think that predicting a stock’s direction is the best way to win with options. However, the most successful options traders think differently.
In this video clip from a recent instructional session, Gavin McMaster walks through his process for finding directionally neutral iron condor spreads using volatility metrics, probability, and technical analysis — instead of guessing which way the stock might move next. The trade target he lands on is Western Digital (WDC), but the real value is discovering his step-by-step process behind the trade.
This is the kind of disciplined workflow that transforms options trading from a speculative gamble into a repeatable source of investment income.
Why Neutral Trades Start With Volatility, Not Direction
Iron condors work best when two conditions line up:
- Implied volatility is elevated, so option premiums are rich
- The stock is unlikely to make a large directional move
That’s why Gavin doesn’t start with charts. Instead, he starts with a custom screener.
Using Barchart’s screeners, he filters for stocks with:
- High IV rank or IV percentile
- Strong liquidity and large market caps
- Earnings reported within the last 2 weeks (no upcoming event risk)
This removes the single biggest wild card in options trading — the post-earnings IV crush — while ensuring that option premiums are still pricing in elevated IV.
That’s how Western Digital surfaced as a candidate during Gavin’s process.
How WDC Emerged for an Iron Condor Trade
Once the volatility metrics checked out, Gavin turned to the stock’s price behavior.
WDC immediately stood out because it was boxed in by clear technical levels:
- Resistance near the 52-week high around $180
- Support near $132–$135, aligning with the 50-day moving average
- Price at the time of recording was comfortably between those levels
This is exactly what directionally neutral spread traders want to see: a stock with clearly defined boundaries, as opposed to strongly trending momentum.
Elevated IV without clear directional price movement is the sweet spot for iron condor traders.
Confirming the Trade With Expected Move
Before building the trade, Gavin validated the idea using Barchart’s Expected Move page for WDC – one of the most important (and underused) tools for options traders.
Expected Move shows the high and low price range forecast for the stock through the contract’s expiration date, based on what the options market is pricing in.
For WDC:
- The upper expected move sat well below $180
- The lower expected move remained above $130
That confirmation of what he was seeing on the charts told Gavin to structure his iron condor outside the expected move range, stacking probability in his favor before the trade was even initiated.
Structuring the Iron Condor: Risk Before Reward
Only after volatility metrics, technical analysis, and expected move align does Gavin open the Short Iron Condor screener.
These are the key trade principles he applies:
- Short strikes placed outside support and resistance
- Call spread above resistance; put spread below support
- Balanced spacing between breakevens
- Risk-to-reward ratios typically between 5:1 and 10:1
Rather than attempting to squeeze max credit, this strategy looks to survive minor variance in the share price while also generating steady income.
Taking the Lesson Beyond Gavin’s Example
The real lesson from this clip isn’t about Gavin’s single trade idea on Western Digital.
It’s the decision sequence:
- Find a liquid, large-cap stock with elevated IV
- Remove earnings risk from the equation
- Identify support & resistance zones on the chart
- Validate technical analysis with Expected Move
- Analyze trade risk first, and credit second
That sequence is repeatable — and Barchart’s pro-grade tools make the process surprisingly fast. This kind of daily screening routine is how professional traders reduce emotion and increase consistency.
The Takeaway
Neutral strategies like iron condors aren’t “boring trades.” They’re disciplined income trades — and they only work when IV, technical analysis, and options risk metrics align.
Gavin’s step-by-step explainer shows exactly how to stack those edges using Barchart’s tools, without guessing on direction or chasing momentum.
If you’re tired of forcing trades in uncertain markets, this is the framework to study:
- Watch the full video lesson from Gavin
- Learn more about Barchart’s Stock Screener
- Explore more options tools from Barchart
- Claim your 30-day free trial of Barchart Premier >>
On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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