Condor Spread
Wide-body butterfly with enhanced profit zone
Positions in Chart: Buy 1 lot of 25600 CE + Sell 1 lot of 25800 CE + Sell 1 lot of 26000 CE + Buy 1 lot of 26200 CE. Spot price: 25800
Setup
Buy lower strike OTM Call + Sell 2 middle strike Calls + Sell higher strike Call + Buy far OTM Call
When to Use
- Professional sideways trading
Market Outlook
Risk & Reward
Strategy Details
Description
A condor spread is an advanced wide-body butterfly strategy that creates a larger profit zone compared to traditional butterflies, making it ideal for professional traders expecting minimal price movement with enhanced probability of success. This four-leg strategy involves buying protective wings at distant strikes while selling the body at middle strikes, creating a rectangular profit zone rather than a peaked profit profile. The strategy excels in low volatility environments where the underlying is expected to trade within a defined range. Professional traders favor condors for their superior risk-reward ratio and wider breakeven points
Example
If NIFTY is at ₹25,800, set up: Buy ₹25,400 Call for ₹45, Sell ₹25,700 Call for ₹85, Sell ₹25,900 Call for ₹75, Buy ₹26,200 Call for ₹35, creating a net debit of ₹20 with maximum profit potential of ₹180 if NIFTY closes between ₹25,700-₹25,900.
This information is for educational purposes only and should not be considered as financial advice. Always consult with a qualified financial advisor before making investment decisions. Data is constructed and is not actual. Calculations may have errors.
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