Condor Spread
An option strategy combining a long lower-strike spread (long put spread or long call spread) with a short higher-strike spread of the same width, all at the same expiration. The structure has four legs and creates a bounded payoff that profits if the underlying stays within the middle range and loses if it breaks out in either direction. Iron condors (the most common variant) express a view that realized volatility will be moderate -- bounded above and below by the strikes. Common in income strategies that aim to harvest premium during range-bound markets while keeping maximum loss bounded.
Lessons that use this term
Related terms
American Option · Asian Option · Barrier Option · Basket Option · Butterfly Spread · Calendar Spread
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