DaytradeTeam Brainzzzz

The Iron Condor is an income-producing options strategy used to profit from stocks that tend to trade within a certain price range. It is basically the same thing as a Long Iron Butterfly in that it is a combination of a Bull Put Spread and a Bear Call Spread, it's just that in an Iron Condor the higher put option is at a lower strike than the lower call option, which gives the Iron Condor its famous risk-plot shape:

Iron Condors are perfect for stocks trading within a set range. You should look for expiration dates that are less than 6 weeks away to maximize the profits from time decay and minimize underlying stock movement risk. Here are the steps to entering an Iron Condor:

1. Buy one lower strike put option, Out of the Money
2. Sell one lower middle strike put, Out of the Money
3. Sell one higher middle strike call option, Out of the Money
4. Buy one higher strike call, Out of the Money (Should be same distance from #3 as #1 is from #2)

All options should have the same expiration date.

Your max profit on this trade will be the net credit that you recieve from the transaction, and your max loss is limited to the difference between the strike prices of the call or put options (#2-#1) minus the net credit from the trade. Our Iron Condor trading system can help guide you into trades that have a high probability of profit along with a desireable risk/reward ratio on the trade.