Iron condor
A short strangle with both tails bought back. Same idea, defined risk, smaller credit.
The view: Range-bound, and you want to sleep.
Construction
| Leg | Qty | Strike at 100 spot |
|---|---|---|
| Long put | 1 | 85 |
| Short put | 1 | 95 |
| Short call | 1 | 105 |
| Long call | 1 | 115 |
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- Max profit
- +197
- Max loss
- -803
- Breakeven
- 93.03 / 106.97
- Net cash
- +197
When it fits
The disciplined version of selling volatility. The wings cost part of the premium and convert an unbounded loss into a known one.
What goes wrong
- The maximum loss is usually several times the credit received.
- Four legs means four lots of spread and commission.
- It needs the underlying to stay inside the range at expiry, not merely to pass through it.
Try it properly
The chart above is the real pricing model, limited to three sliders. To change strikes, add legs, switch to futures, or price it against your own volatility assumption, open it in the options P&L calculator — the link under the chart carries this exact position across.
Education, not advice. Payoffs ignore commission, bid-ask spread, assignment risk and financing.