An iron condor sells an out-of-the-money put spread and call spread at once, collecting premium that you keep if the stock stays within a range. Defined risk on both sides.
Open the Iron Condor calculator →Use an iron condor when you expect a stock or index to trade sideways within a range. You sell an out-of-the-money put spread and an out-of-the-money call spread at once, collecting two credits while defining the risk on both sides.
It performs best in high implied volatility that then calms down: the rich premium you collect decays in your favour as long as the price stays between the short strikes.
Maximum profit is the total credit, kept if the price finishes between the short strikes. Maximum loss is the wider wing width minus the credit, reached if the stock breaks through either side.
Condors need active management — many traders take profit around 50% and adjust or roll the tested side if the price trends toward one of the short strikes.
Use the free OptionProfit Iron Condor calculator to load a live option chain, build the trade, and instantly see the payoff chart, breakevens, probability of profit, Greeks and a Monte Carlo simulation of outcomes.
When the underlying finishes between the two short strikes at expiration, so all four options expire worthless and you keep the full credit.
The condor has a wider profit range and less premium; the butterfly collects more premium but only profits in a narrow band around one strike.
Roll the threatened spread further out, take profit on the safe side, or close the whole position to cap the loss — model it first in the calculator.
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