Iron Condor

Description

A four-leg strategy consisting of a Put Spread and a Call Spread.

Trading Logic

Profits from low volatility. Both risk and reward are capped.

Practical Example

Stock at $100. Sell $110C/Buy $115C, Sell $90P/Buy $85P. Net credit: $3.

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P/L Curve

Chart Description
  • X-Axis: Stock price at expiration
  • Y-Axis: Expected P/L ($)
  • Green area: Profit; Red area: Loss