derivatives

Iron Condor

Definition

A four-leg options strategy combining a bull put spread and bear call spread. Profits when the underlying stays within a defined range. Has defined maximum profit (net premium) and maximum loss (spread width minus premium).

Example

With stock at $100, an iron condor using 90/95 puts and 105/110 calls collected $2.00 in premium, profiting if the stock stayed between $95 and $105.

Explore More

Learn Trading with SignalPro

518 trading terms, 311 lessons, and AI-powered signals — all free to start.

Download Free