Options Income
Iron Condor
Four strikes, one bet: the underlying sits still. Sell a call spread above the market and a put spread below it, collect the combined credit, and keep it if price never reaches either short strike by expiration.
Drag the strikes
Each of the four gold handles below is a strike price. Drag any of them left or right and the payoff line, max profit, max loss, and both breakevens update immediately. Wider wings mean more room for price to move before you lose money, and a smaller credit for taking that trade.
Drag the four gold circles · long put · short put · short call · long call
How it works
The Concept, At A Glance
- It's two credit spreads stacked together. A short put spread below the market and a short call spread above it. Both sides collect a credit, both sides define the maximum possible loss up front.
- Max profit is the credit, full stop. If price is anywhere between the two short strikes at expiration, every option expires worthless and the full credit is kept. That's the entire best case, there's no upside beyond it.
- Max loss is capped by the long strikes. The long put and long call aren't there for profit, they exist to cap the loss if price runs hard in either direction. Max loss equals the width of whichever spread is wider, minus the credit collected.
- Two breakevens, not one. The trade is only profitable inside a specific price range: the lower short strike minus the credit, up to the upper short strike plus the credit. Outside that band, the trade is a loser by expiration.
Where this breaks
A big move in either direction hits every leg at once
Because the position is short volatility on both sides, a sharp move through either short strike, an earnings surprise, a gap, a macro shock, turns a small defined credit into the full defined-risk loss fast, and there's no way to be "only half wrong." Drag both short strikes close together and you'll see the credit grow while the profit zone shrinks to almost nothing: more income, less room for the market to breathe.