Back To Main | Back To Previous

Condor Spread

 Profile Version / Simplified Version / Comprehensive Version


Condor Spread Discussion Condor Spread Discussion   |   Find Similar Risk Profiles Find Similar Risk Profiles



Purpose Of Condor Spread
1. To Profit From Stagnant Stocks


Expectations Of Condor Spread
Stagnant, Trading within A Tight Range


Type Of Spread
Debit Spread


How To Use Condor Spread?
Buy to open 1 In The Money (ITM) option, sell to open 1 At The Money (ATM) option, sell to open 1 Out of The Money (OTM) option and buy to open 1 further Out of The Money (OTM) option.

(a)Buy One (ITM) + (b)Sell One (ATM) + (c)Sell One (OTM) + (d)Buy One (OTM) 		Long Condor Spread Risk Graph Learn How To Read This Chart

explosive option trading mentor Personal Option Trading Mentor
Find Out How My Students Make Over 87% Profit Monthly,
Confidently, Trading Options In The US Market!

Profit Potential of Condor Spread :
Condor spreads achieve their maximum profit potential at expiration if the price of the underlying asset is within the 2 middle strike prices.


Profit Calculation of Condor Spread:
Maximum Profit = (Greatest Difference In Consecutive Strike Price - net debit) x 100
Profit % = (Max Profit - Net Debit) / Net Debit


Risk / Reward of Condor Spread:

Upside Maximum Profit: Limited

Maximum Loss: Limited to net debit paid


Break Even Point (Profitable Range) of Condor Spread:
A Condor Spread is profitable if the underlying asset expires within the profitable range bounded by the upper and lower breakeven points.

1. Lower Breakeven Point : Net Debit + Lower Strike Price
And

2. Upper Breakeven Point : Higher Strike Price - Net Debit


Advantages Of Condor Spread:

  • Large profit percentage due to low cost involve in executing the position.

  • Limited risk should the underlying asset rally or ditch unexpectedly. (unlike the Short Straddle)

  • Maximum loss and profits are predictable.

  • Wider profitable range than a Butterfly Spread.

  • Have customisable profitable range as well as maximum profit range.

  • Able to profit on stocks that are completely stagnant or trading within a tight range.


    Disadvantages Of Condor Spread:

  • Larger commissions involved than simpler strategies with lesser trades.

  • Has a lower maximum profit potential than the other complex neutral option strategies.

  • Has a higher maximum loss potential than the other complex neutral option strategies.


    Recommended!Trade Condor Spreads With Best Options Broker, OptionsXpress!




    cool feature! Don't Know If This Is The Right Option Strategy For You? Try our Option Strategy Selector!





    Continue your journey of discovery...
    Click Me For Content Index
    Click Above For Content Index

    Questions? | Suggestions?
    What Is A Butterfly Spread?
    What Is A Covered Call?
    What Is An Iron Butterfly Spread?
    What Is Iron Condor Spread?
    What Is A Short Straddle?
    What Is A Short Strangle?
    What Is A Covered Put?
    What Is A Collar?
    Back To Strategies Page
    Stock Options
    Options Trading

    Back To Main | Go To Option Trader's HQ

     

    • Javascript Tree Menu

    Keep in touch with our updates through RSS...NOW! Follow www.Optiontradingpedia.com on Twitter

    Our Sponsors

    Important Disclaimer: Options involve risk and are not suitable for all investors. Data and information is provided for informational purposes only, and is not intended for trading purposes. Neither www.optiontradingpedia.com, mastersoequity.com nor any of its data or content providers shall be liable for any errors, omissions, or delays in the content, or for any actions taken in reliance thereon. Data is deemed accurate but is not warranted or guaranteed. optiontradinpedia.com and mastersoequity.com are not a registered broker-dealer and does not endorse or recommend the services of any brokerage company. The brokerage company you select is solely responsible for its services to you. By accessing, viewing, or using this site in any way, you agree to be bound by the above conditions and disclaimers found on this site.

    Copyright Warning: All contents and information presented here in www.optiontradingpedia.com are property of www.Optiontradingpedia.com and are not to be copied, redistributed or downloaded in any ways unless in accordance with our quoting policy. We have a comprehensive system to detect plagiarism and will take legal action against any individuals, websites or companies involved. We Take Our Copyright VERY Seriously!