Click Here
Home > Butterfly Spread, Credit Spread, Iron Condor, Option Strategy, Vertical Spread > condor spread

condor spread

If you're new to our site, make sure to watch our FREE TRADING OPTIONS FOR INCOME VIDEO by Clicking Here. Thanks for visiting!

<< Option Trades  Option Trades >>

Condor

The condor spread is one of the lesser known and/or used option spread strategies.

While the name is similar to the more popular ‘iron condor’ strategy – the ‘condor spread’ is different – even while the risk graph of the trade looks the same.

The difference between the condor and the iron condor is that the condor spread is constructed of all calls or puts – while the ‘iron condor’ is comprised of BOTH call options and put options.

An iron condor example on IBM looks as following:

Buy 2 110 IBM Puts
Sell 2 115 IBM Puts
Sell 2 125 IBM Calls
Buy 2 130 IBM Calls

The iron condor example above utilizes both calls and puts – and it is constructed of 2 separate credit spreads.

A condor example on the same underlying would look as follows -

Buy 2 110 IBM Puts
Sell 2 115 IBM Puts
Sell 2 125 IBM Puts
Buy 2 130 IBM Puts

The condor example above uses ONLY puts – and is composed of a put debit spread as well as a put credit spread.

While constructed differently however – if you were to compare these two option spread strategies next to each other on a risk graph or payoff diagram – they would look extremely similar if not identical.

Creative Commons License photo credit: edenpictures

Technorati Tags: Butterfly Spread, condor spread, Credit Spread, Iron Condor, iron condor spread, iron condors, option selling, option spread trading, Vertical Spread

Leave a Reply

« Option Spread Trading
Iron Condor – *** Weekend Trading Report *** »