Iron Condor Strategy

The iron condor is a market-neutral options strategy that profits when a stock stays within a defined price range. By selling an out-of-the-money put spread and call spread, you collect premium and profit from time decay (theta) as long as the stock stays between your short strikes.

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How It Works

1
Identify stocks with high implied volatility rank (IV rank > 50%) and upcoming time decay
2
Sell an out-of-the-money put spread (bull put) at ~15-20 delta
3
Sell an out-of-the-money call spread (bear call) at ~15-20 delta
4
Select 30-45 days to expiration (DTE) for optimal theta decay
5
Manage at 50% of max profit or adjust if a wing is threatened

Best For

High IV environmentsRange-bound stocksEarnings avoidance playsMonthly income

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Key Terms

Iron Condor Implied Volatility (IV)Options Greeks Credit Spread

Related Signal Types

Volatility Play

Frequently Asked Questions

What is an iron condor?

An iron condor is an options strategy consisting of four options: a bull put spread (sell put, buy lower put) and a bear call spread (sell call, buy higher call). You profit when the stock stays between the short strikes.

What is the maximum loss on an iron condor?

Maximum loss is the width of the wider spread minus the net credit received. This occurs if the stock moves beyond either wing at expiration.

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