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What is a iron condor strategy?

An iron condor strategy is combined with two calls and two puts with four strike prices, all with the same expiration date. An iron condor aims to make a profit when stock prices are expected to go up or down significantly and a short iron condor earns a return when the stock prices are expected to stay stable or move in a narrow range. Both the potential profit and maximum risk are limited.

Long Iron Condor

A long iron 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 two calls and two puts which are spread out over four strike prices, all with the same expiration date. 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 above the highest strike price or below the lowest strike price at expiration.

Short Iron Condor

A short iron condor is a strategy when you expect the price of the underlying security will stay stable or move in a narrow range within a certain time period. It is created with two calls and two puts which are spread out over four strike prices, all with the same expiration date. This strategy is established for a net credit, and both the potential profit and maximum risk are limited. The maximum profit is realized if the stock price is equal to or between the two middle 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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