⚡ Iron Condor Playbook
→Enter at 45 DTE for optimal theta decay curve
→Close at 50% of max profit — don't be greedy
→Manage or roll the tested side at 21 DTE regardless of P&L
→Size to 1–5% of portfolio per trade
→Target short strikes near 15–30 delta on each side
→Best deployed in lower-volatility, range-bound conditions (IVR > 30 for richer credit)
What Is an Iron Condor?
An iron condor is a market-neutral, income-generating strategy built from two credit spreads: a bull put spread below the current price and a bear call spread above it. In its full form it has four legs — a short put and long put below the market, and a short call and long call above it — creating a defined-risk range where the position profits if the stock stays between the two short strikes through expiration.
This calculator focuses on the two short strikes — the short put and short call — that define your credit and your profit range, the portion of the trade that determines whether you're paid or not. In a full iron condor, the further-out long put and long call wings cap your maximum loss on either side; size those wings separately based on how much downside or upside risk you're willing to accept beyond the short strikes.
Worked Example
Using the calculator's default inputs
SPY at $580, selling the $565 put for $4.50 and the $595 call for $3.80, both 45 DTE:
- Combined credit: $830 per condor (($4.50 + $3.80) × 100)
- Profit zone: SPY between $565 and $595 at expiration
- Lower breakeven: $556.70 ($565 short put strike − $8.30 total credit)
- Upper breakeven: $603.30 ($595 short call strike + $8.30 total credit)
- The position keeps the full credit if SPY closes anywhere between the two short strikes
Frequently Asked Questions
What market outlook is an iron condor built for?
A neutral one — you're betting the stock stays within a range rather than making a big move in either direction, which is why iron condors work best in lower-volatility, range-bound conditions.
What happens if the stock breaks out past one of the short strikes?
You start giving back credit as the losing side's option gains value. With protective wings in place, the loss is capped once the stock passes the corresponding long strike; without wings, the short side behaves like a naked position.
Why are both breakevens wider than the short strikes themselves?
Because the total credit collected from both sides gives you a buffer — the stock can move past either short strike by up to the credit amount before the position starts losing money.
How wide should I set my short strikes?
Many traders target strikes with roughly a 70–85% probability of expiring out of the money on each side, equivalently around a 15–30 delta, balancing a wider profit zone against a smaller credit.