Iron Condor Calculator

An iron condor combines an OTM put spread and call spread on the same underlying and expiration. The short iron condor—the more common version—collects a net credit and profits when the stock stays within a range. The long iron condor pays a net debit and profits from big moves in either direction.

Short Iron Condor (Credit)

The short iron condor is a net credit strategy. You sell an OTM put and buy a further OTM put below the stock price, then sell an OTM call and buy a further OTM call above the stock price. You profit when the stock stays between the short strikes through expiration.

Short Iron Condor Metrics

• Max Profit: Net credit received × 100 × number of contracts. Achieved when the stock closes between the short strikes at expiration.
• Max Loss: (Wider spread width − net credit) × 100 × number of contracts. Occurs when the stock closes at or beyond either long strike at expiration.
• Lower Breakeven: Short put strike − net credit.
• Upper Breakeven: Short call strike + net credit.
• Ideal When: Neutral outlook, expecting low volatility and range-bound price action.

How to Read the P/L Chart

The white line (expiration) shows the expiration P/L for the position. If the stock finishes anywhere between the short strikes, all four options expire worthless and you keep the full credit. If the stock finishes between a short strike and its corresponding long strike, you'll have a partial profit or loss. Beyond the long strikes, losses are capped.

The cyan line (T+0) shows theoretical P/L at the time of entry. Time decay works for you when the stock stays centered. With the stock price between the short strikes, the position has positive theta and profits from time passing. Near the wings, this reverses. Where T+0 sits relative to expiration reveals your theta: T+0 below expiration = positive theta (time helps), T+0 above expiration = negative theta (time hurts).

When to Trade a Short Iron Condor

Short iron condors work best when you expect the stock to stay range-bound. If you think a $100 stock will trade between $90 and $110 for the next month, a short iron condor lets you profit from that stability. Selling further OTM spreads increases probability of profit but collects less premium—you'll have less profit potential and more loss potential (worse risk/reward in exchange for a higher win rate).

Selling a narrower iron condor (spreads closer to the stock price) results in a higher net credit and better risk/reward, but a lower probability of profit since the stock needs to stay in a tighter range.

Most traders sell iron condors with 30-60 DTE and close at 50-75% of max profit to lock in gains and avoid gamma risk near expiration.

Long Iron Condor (Debit)

The long iron condor is the inverse—you buy an OTM call spread and OTM put spread (paying a net debit) and profit when the stock makes a big move in either direction. You're betting on volatility.

Long Iron Condor Metrics

• Max Profit: (Spread width − net debit) × 100 × number of contracts. Achieved when the stock closes at or beyond either short strike at expiration.
• Max Loss: Net debit paid × 100 × number of contracts. Occurs when the stock closes between the long strikes at expiration.
• Lower Breakeven: Long put strike − net debit.
• Upper Breakeven: Long call strike + net debit.
• Ideal When: Expecting a big move but unsure of direction.

Short Iron Condor vs Short Iron Butterfly

Both are neutral strategies that profit from range-bound stocks. A short iron butterfly has the short put and short call at the same strike (ATM), creating a narrower profit zone but collecting more credit. The iron condor separates the short strikes for a wider profit zone but smaller credit. Choose the iron condor for a wider profit range; choose the iron butterfly when you're expecting the stock to pin a tight range near expiration.

A Note on Early Assignment

Any short option can be assigned early, typically when deep ITM near expiration or when an ITM short call approaches an ex-dividend date. If the short put is assigned, you buy 100 shares at the strike price. If the short call is assigned, you sell (short) 100 shares at the strike price. If assigned, your max loss doesn't change—the long options still cap your risk. Only your position structure changes.