Name: Iron Condor

Setup: Buy (long) Strike A put and Sell (short) Strike B put and Sell (short) Strike C call and Buy (long) Strike D call

Bias: Neutral


Break-Even: Two break-even points:


  • Strike B – Credit received
  • Strike C + Credit received

Max Profit: Limited: Credit received

Max Loss: Limited: Strike B – Strike A – Credit received

Margin: Greater of the following:

  • Short call spread requirement
  • Short put spread requirement

Time Decay: Time decay is your friend as you want all of the options to expire worthless.

Implied Volatility: If the underlying is between Strike B and Strike C you want volatility to decrease.  Ideally you want all the options to expire worthless to collect the full credit.  A decrease in volatility will increase the value of your position and make the chances of a move outside of these strikes less likely.

Notes: None at this time

Featured in Trade Review: None at this time