The Iron Condor
Get paid when the stock does nothing
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Two credit spreads, glued together over the current price. The strategy that pays you when the stock does absolutely nothing.
You already know the bull put spread — a credit spread sitting below the price. Now imagine adding its mirror image above the price: a bear call spread, where you sell a call and buy a farther call for protection.
Stack those two credit spreads on the same stock and the same expiry, and you’ve built an Iron Condor. You collect two credits, and you win as long as the stock stays parked comfortably in the middle. It’s not one exotic new trade — it’s two friends you’ve already met, holding hands over the current price.
A Condor has four strikes. The two you sell sit closest to the price and mark the edges of your profit zone. The two you buy sit farther out as protective wings. Finish between the shorts and all four expire worthless — you keep both credits.
Boring is beautiful
A Condor is the exact opposite of a big-move bet. It doesn’t want fireworks. It wants the stock to shuffle sideways, bored, doing nothing interesting until expiry. Quiet and range-bound is the dream.
That makes it a favourite for calm, choppy markets — the long stretches where a stock just can’t seem to pick a direction. Where a straddle buyer is tearing their hair out waiting for a move, the Condor seller is happily collecting.
Sell the middle, protect the edges, and root for boredom. The Condor’s enemy is excitement.
Why bother buying the wings?
The two outer options cost you a slice of your credit, so why include them? Because they’re what turn open-ended danger into a fixed, known loss. If the stock blows clean through a short strike, the matching wing catches the fall.
You surrender a little premium for a lot of peace of mind. That’s what makes the Condor a defined-risk trade: before you ever open it, you know the exact worst-case number staring back at you.
The farther each wing sits from its short strike, the bigger the gap a bad move can open up — and the more you can lose. You’ll collect more credit for going wide, but you’re also raising your worst case. Balance the two on purpose, not by accident.
A Condor only loses if the stock breaks out of your range — up through the call side or down through the put side. Stay in the middle and both spreads win together. Your job is simply to draw a range you believe the stock will respect.
Two credit spreads, four legs, one calm range. You’ve tamed the Condor. Next, we squeeze those two short strikes together into a single point — and trade a fatter credit for a tighter target. 🦅