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Short Iron Condor

Short Iron Condor

  • date-icon Sep-13-2024

Short Iron Condor

Market View

Range-bound, not moving

The Trade

Sell a Put below stock price and sell a Call above the stock price. Your view is that the stock won’t cross these strikes. Buy a lower Put and a higher Call for protection on both sides just in case you're wrong.

Premium

Receive

Margin

Required

When To Do

  • If the stock will stay still and expire between the call and put strike
  • Avoid trending markets
  • Avoid selling low IV

Pros

  • Delta Neutral – Immune to small moves
  • Make money if nothing happens
  • Limited loss

Cons

  • None

Time and Volatility

  • Gains time value every day
  • Loses moderately if IV goes up