Premium Gauge

IC credit level indicator for market condition assessment

📚 From the SPX Mastery Series by Russell Clark

Definition

A quick-read signal that uses Iron Condor credit levels to assess current market conditions. When IC credit is ≤$0.85, it signals calm conditions and represents a "strong buy" for Iron Condor placement. Higher credits indicate elevated volatility requiring caution or tier adjustment. Premium Gauge is checked alongside EDR and VIX as part of the pre-close scanning workflow.

Formula / Rules

Credit ≤ $0.85 → Calm/strong buy Credit $0.85–$1.30 → Normal/proceed with appropriate tier Credit > $1.30 → Elevated volatility/caution, consider Conservative only

How It Works

The Premium Gauge acts as a fast market temperature check. Low credits (≤$0.85) tell you the market is calm and strike selection can be aggressive relative to EDR's High tier. Normal credits ($0.85–$1.30) indicate standard conditions. Elevated credits (>$1.30) signal that the market is pricing in uncertainty, and the trader should default to the Conservative (Low) tier or consider skipping the trade. The gauge is most useful as a sanity check against EDR outputs — if EDR says High tier but Premium Gauge reads elevated, trust the Premium Gauge and downgrade to Medium or Low.

Source

Iron Condor Command

Related Terms

Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss. Always paper trade first.