EXAMPLE
Iron condor
Illustrative example
- Underlying
- $100.00
- Entry credit before fees
- $180
- Breakeven
- $93.23, $106.77
- Max profit
- $177.4
- Max loss
- -$322.6
- Expires
- 2026-10-16
Premium strategy tool
Iron Condor Screener & Risk Analysis
An iron condor sells a put spread below the stock and a call spread above it in one expiration. It collects a net credit and profits if the stock finishes between the two short strikes.
Four legs create two breakevens and a defined maximum loss, but only one side can lose at expiration.
Product preview
The chart below is the same payoff component used inside the platform, run on the hypothetical example described later on this page.
Iron condor
A put credit spread plus a call credit spread: collects a credit if the stock stays between the short strikes.
Illustrative example
- Buy$90 put
- Sell$95 put
- Sell$105 call
- Buy$110 call
Profit zoneLoss zoneStock priceBreakeven
- Example stock
- $100.00
- Entry credit before fees
- $180
- Breakeven
- $93.23, $106.77
- Max profit
- $177.4
- Max loss
- -$322.6
- Evaluated at
- Expiration
Includes $0.65 entry commission per option contract. Exit, exercise/assignment fees and taxes are excluded.
Payoff scenario
Illustrative example, read-only. Hypothetical inputs run through TradingSignalAI's payoff model.
Illustrative example
- Hypothetical underlying
- $100.00
- Entry credit before fees
- $180 ($1.80/share)
- Position · standard 100-share contracts
- Buy $90 put · sell $95 put · sell $105 call · buy $110 call
Expiration payoff
1 condor · 1 contracts per leg (4 total) · expires 2026-10-16
Hover, touch, or focus the chart and use arrow keys to read P/L at a price.
- Shaded above $0: profit
- Shaded below $0: loss
- Solid line: P/L at expiration
- Dashed line: reference price
- Circle: break-even
- Dotted line: strike (values below)
- Break-even
- $93.23, $106.77
- Strikes
- $90.00, $95.00, $105.00, $110.00
- Payoff profit cap
- $177.4
- Max loss
- $322.6
The chart shows underlying prices from $78.00 to $122.00 only. Losses or gains outside this window can be larger; the window's lowest and highest points are not maximum risk.
Includes $0.65 entry commission per option contract. Exit, exercise/assignment fees and taxes are excluded.
Move the pointer or focus the chart and use the left and right arrow keys to read profit or loss at each stock price. These are not live quotes or signals.
Metrics in pictures
Implied volatility: the range the market prices in
Example: $100 stock, 30 days to expiration. One-standard-deviation move = stock x IV x sqrt(days / 365).
Illustrative example
- Lower IV 20%+/- $5.73
Smaller expected range, lower premium for the same strike and expiration.
- Typical IV 30%+/- $8.6
A middle reading for this example.
- Higher IV 50%+/- $14.33
Wider expected range and larger premium, with more risk of a large move.
Bars span the one-standard-deviation range around the stock price. Not a forecast. IV rank in the product uses a realized-volatility proxy, not a historical implied-volatility rank.
Delta: directional exposure
Select a delta to see what it means for one call contract.
Illustrative example
Out of the money, delta 0.30
Moderate sensitivity. Sold options here collect more premium than at 0.15 and are more likely to finish in the money.
One standard contract has about 30 shares of price exposure: roughly $30.00 per small $1 stock move, or $0.30 per quoted share, with other inputs held constant.
Delta is a model sensitivity, not a probability forecast. Values shown are examples, not quotes.
How the iron condors tool works
- The finder assembles four-leg structures with defined wing widths in the same expiration.
- Candidates are filtered for liquidity on each leg.
- Results compare total credit, both breakevens, maximum loss and return on risk.
- The chart marks all four strikes and both breakevens.
Metrics you will see
| Metric | Meaning |
|---|---|
| Net credit | Sum of both short-leg credits minus both long-leg costs. |
| Maximum profit | Net credit times 100. |
| Maximum loss | (Wider wing - credit) x 100. |
| Lower and upper breakeven | Short put strike minus credit; short call strike plus credit. |
| Profit range | Distance between breakevens. |
Worked example
Hypothetical example for a stock trading at $100. Not a quote, a recommendation or a result. Sell the $95 put and $105 call; buy the $90 put and $110 call for a $1.80 total credit.
| Item | Calculation |
|---|---|
| Maximum profit | $1.80 x 100 = $180 between $95 and $105 |
| Maximum loss | ($5.00 - $1.80) x 100 = $320 beyond either outer strike |
| Breakevens | $95 - $1.80 = $93.20 and $105 + $1.80 = $106.80 |
| Return on risk | $180 / $320 = 56% |
Both sides cannot reach maximum loss at once. Four commissions and four bid-ask spreads are a meaningful part of a small credit.
Risks to understand
- A large move in either direction produces the maximum loss, often several times the maximum profit.
- Either short leg can be assigned early.
- Four legs raise transaction cost and slippage.
- A rising volatility environment can hurt the structure before expiration.
Access
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Eligible new customers can begin a 7-day Premium trial. A payment method is required, and the selected plan bills automatically at the end of the trial unless canceled. Registration alone is not a Premium subscription.
Frequently asked questions
Learn more
- Implied Volatility: Options Pricing & LimitsUnderstand implied volatility, its relationship to premiums and expected movement, and why volatility estimates and historical proxies have limitations.
- Options Greeks: Delta, Gamma, Theta & VegaUnderstand option-price sensitivities with practical examples. Learn how delta, gamma, theta and vega interact rather than relying on a single metric.
- Options Assignment: Share Delivery & RiskUnderstand exercise, early assignment, share delivery and expiration risk. Learn why covered positions and defined-risk spreads still need active review.
- Options Expiration, DTE & Return ComparisonsUnderstand days to expiration, exercise and assignment timing, and why normalized or annualized returns are comparisons rather than income promises.
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Research the trade before you place it
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