Short Iron Condor
Description
Selling a put spread below the market and a call spread above it, collecting a net credit that is kept in full if the underlying stays between the two short strikes.
Setup
- Sell a put spread: sell a put closer to the money, buy a put further out for protection.
- Sell a call spread: sell a call closer to the money, buy a call further out for protection, same expiry.
Context
One of the most widely used income strategies: a defined-risk bet that the underlying stays within a range through expiry.
Risk Profile
Maximum gain is the net credit received, anywhere between the two short strikes. Maximum loss is the width of either spread minus that credit.
Pros
- Collects a credit up front.
- Defined, capped risk on both sides.
- Wide profit range compared to a short straddle or short iron butterfly.
Cons
- Maximum gain is modest relative to the capital or margin required.
- Four legs means more commissions and more to manage.
Effect of Time
Time decay favors the position as expiry nears, so long as the underlying stays between the two short strikes.
Effect of Volatility
A drop in implied volatility helps the position; a rise hurts it, since it raises the odds of a move outside the range.
Look-Alike Strategies
Live Structure
| Position | Right | Ratio | Strike | Expiry | Premium | Fill Price | Est. Fee |
|---|---|---|---|---|---|---|---|
| Long | Put | 1 | $83500.0000 | 24 Sep 2026 | $46.4488 | $59.1166 | $5.8061 |
| Short | Put | 1 | $84000.0000 | 24 Sep 2026 | $101.3446 | $84.4538 | $12.6681 |
| Short | Call | 1 | $85000.0000 | 24 Sep 2026 | $80.2311 | $67.5631 | $10.0289 |
| Long | Call | 1 | $85500.0000 | 24 Sep 2026 | $33.7815 | $42.2269 | $4.2227 |
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 | -$398.6546 | -393.4% |
| $83500.0000 | -$500.0000 | -$398.6546 | -393.4% |
| $83898.6546 breakeven | -$101.3454 | $0.0000 | +0.0% |
| $84000.0000 | $0.0000 | $101.3454 | +100.0% |
| $84453.8800 current | $0.0000 | $101.3454 | +100.0% |
| $85000.0000 | $0.0000 | $101.3454 | +100.0% |
| $85101.3454 breakeven | -$101.3454 | $0.0000 | +0.0% |
| $85500.0000 | -$500.0000 | -$398.6546 | -393.4% |
| $87500.0000 | -$500.0000 | -$398.6546 | -393.4% |