Iron Condor Strategy Mastery

An Iron Condor is a four-legged option strategy that consists of a bull put spread and a bear call spread. It is designed to profit from a stock experiencing low volatility.

Structure

1. Sell Out-of-the-Money (OTM) Put
2. Buy further OTM Put (Protection)
3. Sell OTM Call
4. Buy further OTM Call (Protection)

Example

If Nifty is at 19,000, you might sell the 18,500 Put and buy the 18,300 Put, while also selling the 19,500 Call and buying the 19,700 Call.

Advantages

• Defined risk: You know your maximum loss upfront.
• High probability: Profits as long as the price stays within the wide range.

Risk Management

Adjust the wings if one side is threatened, or close the trade when 50% of the maximum profit is reached.