Iron Condor options strategy
An iron condor combines a bull put spread and bear call spread. It earns a limited credit when price stays between the short strikes, with defined losses outside the wings.
- Market outlook
- Neutral
- Construction
- Sell an out-of-the-money put spread and call spread with the same expiry.
- Maximum risk
- Spread width minus net credit.
- Maximum reward
- Net credit received.
- Breakeven at expiry
- Short put minus credit and short call plus credit.
Strategy questions
- What is a Iron Condor?
- An iron condor combines a bull put spread and bear call spread. It earns a limited credit when price stays between the short strikes, with defined losses outside the wings.
- What is the maximum risk of a Iron Condor?
- Spread width minus net credit.
Risk note
Options are leveraged and expire. Model payoff at multiple prices and volatility levels in the Options Strategy Lab before considering a position.