Iron Condor

Sell Call spread + Sell Put spread

Positions in Chart: Buy 25400 PE, Sell 25600 PE, Sell 26000 CE, Buy 26200 CE. Spot price: 25800

Setup

Sell OTM Call spread + Sell OTM Put spread

When to Use

  • Profit from low volatility and sideways movement

Market Outlook

Volatility ExpectationExpected to Fall
Price DirectionExpected to Stay Flat

Risk & Reward

Breakeven PointTwo breakeven points
Max Contract LossStrike Width - Net Credit
Max Position LossSame as Max Contract Loss

Strategy Details

Complexity LevelAdvanced
DirectionNeutral - Not much move
VolatilityFall
Number of Legs4 Leg
Strategy TypeCredit
Hedging CapabilityHeavily Hedged

Description

An iron condor combines a bear call spread and a bull put spread. It involves selling an out-of-the-money call and put while buying further out-of-the-money options for protection

Example

If NIFTY is at ₹25,800, you might sell ₹26,000 Call, buy ₹26,200 Call, sell ₹25,600 Put, and buy ₹25,400 Put, collecting a net credit.

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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Iron Condor - Options Strategy Guide | WaveNodes Professional