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What is a condor strategy?

A condor strategy is a non-directional options strategy that limits both gains and losses while seeking to profit from either low or high volatility. There are two types of condor strategy. A long condor aims to make a profit when stock prices are expected to stay stable, and a short condor earns a return when the stock prices are expected to go up or down significantly. Both long and short condors can use either calls or puts, but they always use just one of them at a time.

Long Condor

A long condor is a strategy when you expect the price of the underlying security will stay stable within a certain time period. It is created with either four calls or four puts. This strategy is established for a net debit, and both the potential profit and maximum risk are limited. The maximum profit is realized if the stock price is between the middle two strike prices at expiration. The maximum risk is the net cost of the strategy and is realized if the stock price is above the highest strike price or below the lowest strike price at expiration.

Short Condor

A short condor is a strategy when you expect the price of the underlying security will go up or down significantly within a certain time period. It is created with either four calls or four puts. This strategy is established for a net credit, and both the potential profit and maximum risk are limited. The maximum profit is the net premium received of the strategy and is realized if the stock price is above the highest strike price or below the lowest strike price at expiration. The maximum risk is realized if the stock price is between the middle two strike prices at expiration.


Option trading entails significant risk and is not appropriate for all investors. Option investors can rapidly lose the entire value of their investment in a short period of time and incur permanent loss by expiration date. You need to complete an options trading application and get approval on eligible accounts. Please read the Characteristics and Risks of Standardized Options and Option Spread Risk Disclosure before trading options.

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