Back To Main | Back To Previous

Iron Condor Spread

 Profile Version / Simplified Version / Comprehensive Version

Purpose Of Iron Condor Spread
1. To Profit On Stagnant Stocks
2. To Recieve A Net Credit


Expectations Of Iron Condor Spread
Stagnant


Type Of Spread
Credit Spread


How To Use Iron Condor Spread?
Buy To Open X number of far Out Of The Money Call Options. 2. Sell To Open X number of Out Of The Money Call Options. 3. Buy To Open X number of far Out Of The Money Put Options. 4. Sell To Open X number of Out Of The Money Put Options.

Buy OTM Call + Sell OTM Call + Buy OTM Put + Sell OTM Put 		Iron 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 Iron Condor Spread :
Iron Condor Spreads achieve their maximum profit potential at expiration if the price of the underlying asset is within the price range bounded by the strike price of the short call and put options.


Profit Calculation of Iron Condor Spread:
Maximum Profit = Net Credit.
Profit % = (Credit Gained From Short Legs / Greatest Difference In Strike) x 100
Maximum Loss Possible = Difference in strike between long and short options - Net Credit


Risk / Reward of Iron Condor Spread:
Upside Maximum Profit: Limited to net credit gained

Maximum Loss: Limited to calculated maximum loss


Break Even Points (Profitable Range) of Iron Condor Spread:
An Iron Condor Spread is profitable as long as the price of the underlying stock stays within the Profitable Range bounded by the Upper and Lower BreakEven points.

Upper Break Even Point = Short Call Strike + Net Credit

Lower Break Even = Short Put Strike - Net Credit


Advantages Of Iron Condor Spread:

  • Able to profit on stagnant stocks.

  • Being a credit spread, it reduces overall risk with a higher probability of ending in a profit than a debit spread.

  • Maximum loss and profits are predictable.

  • Very versatile as position can be transformed into a Bear Call Spread or Bull Put Spread easily.


    Disadvantages Of Iron Condor Spread:

  • Larger commissions involved than simpler strategies with lesser trades.

  • Not a strategy that traders with low trading levels can execute.


    Recommended!Trade Iron 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 Covered Call?
    What Is Butterfly Spread?
    What Is Iron Butterfly Spread?
    What Is 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!