Iron Condor
In plain English
The workhorse income trade. You sell a put spread below and a call spread above, getting paid if the price stays in a band. Both sides are protected, so your loss is capped — the safer cousin of a short strangle.
How it's built
Sell an OTM put spread and an OTM call spread — defined-risk, range-bound income.
Illustrative payoff at expiry on a NIFTY-like underlying (spot 24,000, 7d, 13% IV). The shape is the point — open it in the Strategy Lab to tune spot, time and volatility live.
Max profit₹6,694
Max loss₹3,056
Net premiumCr ₹6,694
Breakevens23,797 / 24,203
When to use it
Neutral, expecting the price to stay within a range, IV elevated. The defined-risk version of a short strangle.
Max profit
Net credit received (price stays between the short strikes).
Max loss
Limited to (wing width − net credit).
Common mistakes
- Wings too narrow for the credit collected.
- Holding through expiry when a short strike is breached.