Defined vs Undefined Risk

A defined-risk structure has a known maximum loss capped by a long option wing. Iron condors, credit spreads, and debit spreads are all defined-risk. An undefined-risk structure (naked options, short strangles) has theoretically unlimited loss on the call side. ACondor enforces defined-risk-only in IRA and cash accounts automatically. In margin accounts, undefined-risk is off by default for all engines and must be explicitly enabled per-symbol.

Financial Information Disclaimer

This site provides general information about ACondor, a software tool for automating options trading strategies. Nothing on this site is investment, tax, or financial advice. Options trading involves substantial risk of loss. Past behavior of any strategy does not guarantee future results. Consult a licensed financial professional before trading options. ACondor may earn a commission from affiliate links at no extra cost to you.