Reverse Iron Condor Spread

How Does Reverse Iron Condor Spread Work in Options Trading?

Learn How To Read This Chart

Purpose Of Reverse Iron Condor Spread

1. To Profit From Stocks Expected To Go Up Or Down Quickly

Expectations Of Reverse Iron Condor Spread

Volatile

Type Of Spread

Debit Spread

How To Use Reverse Iron Condor Spread?

There are 4 option trades to establish for this strategy : 1. Sell To Open X number of far Out Of The Money Call Options. 2. Buy To Open X number of Out Of The Money Call Options. 3. Sell To Open X number of far Out Of The Money Put Options. 4. Buy To Open X number of Out Of The Money Put Options.


Buy OTM Call + Sell OTM Call + Buy OTM Put + Sell OTM Put

Profit Potential of Reverse Iron Condor Spread :

Reverse Iron Condor Spreads achieve their maximum profit potential at expiration if the underlying stock expires above the Upper Breakeven Point or below the Lower Breakeven Point.

Profit Calculation of Reverse Iron Condor Spread:

Maximum Loss = Net debit.
Maximum Profit Possible = Greatest Difference In Consecutive Strike - Net debit

Risk / Reward of Reverse Iron Condor Spread:

Upside Maximum Profit: Limited

Break Even Points of Reverse Iron Condor Spread:

Upper Break Even Point = Long Call Strike + Net debit

Lower Break Even = Long Put Strike - Net debit

Advantages Of Reverse Iron Condor Spread:

Has a wider breakeven range than a Reverse Iron Butterfly Spread.

Read The Long Version of Reverse Iron Condor Spread

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