Selling both sides at once and getting paid for a stock going nowhere.
2 min read
An iron condor is two credit spreads on the same stock and expiration: a put credit spread below the price and a call credit spread above it. You collect both credits and profit if the stock finishes anywhere between the two short strikes.
A four-leg condor
Stock at $100.
Sell the $95 put, buy the $90 put → credit $0.80
Sell the $105 call, buy the $110 call → credit $0.75
Total credit: $155. Width of each side: $5.
Max loss: (5.00 − 1.55) × 100 = $345 — only one side can lose.
Profit range at expiration: $93.45 to $106.55.
Not direction — range. The condor pays when the stock stays put and when implied volatility falls. That makes it a volatility position: you want to open it when IV is elevated, because you're selling expensive options and hoping they get cheaper. Opening one in a quiet market collects a credit too small to justify the risk. See IV rank.
The risk/reward is deliberately unattractive-looking
Risking $345 to make $155 needs a win rate around 70% just to break even, before commissions and before the trades you close early at a loss. Condors are sold on the premise that stocks stay in range more often than they don't — which is true, but the margin is thinner than the high win rate suggests. A single trade that runs to max loss erases several winners.
Iron condors also demand four commissions and four bid/ask spreads to open and potentially four more to close. On a $155 credit that friction is a real share of the edge, and it's why condors are usually traded on liquid index products rather than individual stocks.
Not tracked in Wheel Folio yet
A four-leg position with a combined max loss and a profit range needs a genuinely different data model from a wheel cycle. It's on the list; it isn't there today.
Educational only
Nothing here is investment, financial, or tax advice. Options carry risk, including losing more than the premium collected, and the examples use round numbers to show the mechanics rather than to suggest a trade. Read risk and position sizing before putting real money behind any of it.
Put Credit Spreads
A cash-secured put with a floor bolted on — far less capital, and no shares at the end.
The Greeks & Implied Volatility
Four numbers that tell you what a position will do next. Delta and IV rank do most of the work.
Straddles & Strangles
Trading movement itself, in either direction — and the one version with genuinely unlimited risk.