Long Iron Condor
Description
Buying a put spread below the market and a call spread above it, paying a net debit that pays out if the underlying moves outside the two long strikes.
Setup
- Buy a put spread: buy a put closer to the money, sell a put further out.
- Buy a call spread: buy a call closer to the money, sell a call further out, same expiry.
Context
The reverse of a short iron condor: a defined-risk bet that the underlying breaks out of its recent range, used when a move is expected but its direction is unclear.
Risk Profile
Maximum loss is the net debit paid, anywhere between the two long strikes. Maximum gain is the width of either spread minus that debit.
Pros
- Defined, capped risk and reward.
- Profits from a breakout in either direction.
- Cheaper than a comparable long strangle in many market conditions.
Cons
- Maximum gain is capped even on a large breakout.
- Four legs means more commissions and more to manage.
Effect of Time
Time decay works against the position as expiry nears, if the underlying stays between the two long strikes.
Effect of Volatility
A rise in implied volatility helps the position; a drop hurts it.
Look-Alike Strategies
Live Structure
| Position | Right | Ratio | Strike | Expiry | Premium | Fill Price | Est. Fee |
|---|---|---|---|---|---|---|---|
| Short | Put | 1 | $83500.0000 | 24 Sep 2026 | $33.8150 | $25.3612 | $4.2269 |
| Long | Put | 1 | $84000.0000 | 24 Sep 2026 | $76.0839 | $92.9915 | $9.5105 |
| Long | Call | 1 | $85000.0000 | 24 Sep 2026 | $88.7646 | $101.4452 | $11.0956 |
| Short | Call | 1 | $85500.0000 | 24 Sep 2026 | $33.8151 | $25.3613 | $4.2269 |
Estimated Cost to Assemble
An estimate of what entering this structure right now would really cost: filling every leg by crossing the spread (the ask when buying, the bid when selling) instead of at the mid-price, plus an estimated exchange fee. Real fees and fills can differ from this estimate.
Payoff & Greeks vs. Underlying Price
The Greeks curves are a Black-Scholes model using each leg's current implied volatility, holding time to expiry fixed -- not live exchange data at every price, which only exists at the current price (dashed line).
Payoff at Expiration
This structure's value and profit/loss at expiration, at a handful of specific prices: every leg's strike, every breakeven, the current spot, and the chart's own range.
| Underlying Price | Value at Expiration | Profit / Loss | Return on Cost |
|---|---|---|---|
| $81500.0000 | $500.0000 | $402.7816 | +414.3% |
| $83500.0000 | $500.0000 | $402.7816 | +414.3% |
| $83902.7816 breakeven | $97.2184 | $0.0000 | +0.0% |
| $84000.0000 | $0.0000 | -$97.2184 | -100.0% |
| $84537.7000 current | $0.0000 | -$97.2184 | -100.0% |
| $85000.0000 | $0.0000 | -$97.2184 | -100.0% |
| $85097.2184 breakeven | $97.2184 | $0.0000 | +0.0% |
| $85500.0000 | $500.0000 | $402.7816 | +414.3% |
| $87500.0000 | $500.0000 | $402.7816 | +414.3% |