Multiple Entries Iron Condor, better known as MEIC, has become a popular 0DTE Iron Condor strategy. But Tom Nunamaker believes one part of the strategy can be improved: what happens after the first side of the iron condor is stopped out.
His variation, called Talon, is a systematic 0DTE iron condor strategy designed for reducing losses rather than trying to increase winners. Tom’s summary is straightforward: “similar profit, but less drawdown is the bottom line.”
Learn about Tom's Talon strategy in this video
Tom Nunamaker
Tom Nunamaker has been involved with options for decades. His interest began in the early 1980s, and after a 20-year Air Force career, he returned to trading, later working with options educator Dan Sheridan. The name Talon comes from the T-38 Talon aircraft Tom flew as an instructor pilot. Tom runs the options trading service Aeromir.
The basic idea behind MEIC
Talon starts with the basic structure of MEIC, or Multiple Entire Iron Condors.
A trader enters several 0DTE iron condors during the day. Each iron condor consists of a put credit spread and a call credit spread. The total premium collected for the full iron condor is then used as the stop amount on each side.
For example, if the iron condor collects $2.00 in total credit, the trader would use approximately that amount as the stop on the put side and the call side.
If one side is stopped while the other expires worthless, the trade can end around breakeven. The bigger problem comes when the market reverses strongly enough to stop out both sides — what MEIC traders commonly call a double stop.
That double-stop risk is where Talon makes its main adjustment.
- Here are two videos about the MEIC strategy:
- John EInar Sandvand: 0DTE Breakeven Iron Condor
- Tammy Chambless: Multiple Entries Iron Condors (MEIC)
The key Talon adjustment
Tom originally researched whether he could improve MEIC by finding better entries. He tested different market indicators and volatility measures, but says he did not find anything sufficiently predictive.
So he shifted his attention from the profit side to the loss side.
The main Talon adjustment happens after the first stop is hit.
At entry, both sides use the normal MEIC-style stop. But once one side is stopped out, Talon tightens the stop on the remaining side. If the market then reverses and creates a double stop, the second loss should be smaller than it would have been using the original stop.
Tom says tighter stops can lead to slightly more double stops, but each loss is smaller. In his testing, the double-stop rate was roughly 15% to 17%.
How Tom trades the 0DTE iron condor strategy
Talon is traded on SPX options expiring the same day.
Tom currently uses:
- 30-point-wide spreads
- Six entries per day
- The first entry at noon Eastern
- New entries every 30 minutes through 2:30 PM
- Roughly $0.80 to $1.10 credit per side
- Equal premium targets on the put and call sides
- Approximately 10 to 12 delta on the short strikes as a typical result of the premium selection
Tom does not use a directional entry signal. The trades are entered mechanically at fixed times, and the credit target is set in advance.
There is also no traditional profit target. Positions that remain open are allowed to expire, while the primary exits come from the stop-loss rules.
Stops are placed on the short options. If a short option is stopped out, the long option on that side is then closed manually. Tom also adjusts the remaining stop periodically as the value of the long option changes.
Four years of tick-data testing
A major part of Tom’s work on Talon has been the testing process.
He built a database of SPX 0DTE option tick data containing around 71 billion rows and more than 400 GB of data. He says one-minute data was not detailed enough to model stops accurately when markets moved quickly.
Tom’s backtests showed profits for Talon and MEIC in a similar range, but significantly smaller drawdowns for Talon.
In the four-year comparison he presented, the actual maximum drawdown was about $3,000 for Talon versus about $9,000 for MEIC. His Monte Carlo analysis also showed a lower estimated drawdown for Talon.
Tom emphasizes that these are primarily backtested results. He says he has traded the approach for several years, but the live-forward tracking shown in the interview began on July 27 and is updated separately.
Talon does not eliminate risk
Despite the lower drawdowns in Tom’s research, Talon is not presented as a low-risk strategy.
He rates it around 6 out of 10 on his personal risk scale. Only about 49% of trading days are profitable, so traders should expect losing streaks. The strategy also requires enough capital to handle multiple positions and periods when several trades are stopped on the same day.
The central idea is therefore not to avoid losses.
It is to make the damaging trades less damaging.
For traders already interested in 0DTE iron condor strategies, that makes Talon an intriguing variation: keep the mechanical structure of MEIC, but manage the remaining side more aggressively once the first stop has been triggered.
