Iron Condor

An iron condor is a four-leg options structure. You sell an out-of-the-money put (the short put), buy a put further below it (the long put wing), sell an out-of-the-money call (the short call), and buy a call further above it (the long call wing). The credit collected when you enter is your maximum profit. The difference between the short and long strikes (the wing width) minus the credit collected is your maximum loss. Maximum loss is defined and capped at entry: you cannot lose more than the wing width per contract regardless of how far the underlying moves. ACondor's mechanical engine defaults to 10-dollar-wide wings and 20-delta short strikes, with the width selectable per account in $5 increments (5, 10, 15, or 20). At those parameters, a 10-wide iron condor collecting $3.00 credit has max profit $300 and max loss $700 per contract.