Iron Condor Options Calculator
Build an iron condor options trade and calculate net credit, max profit, max loss, and both breakeven prices.
Includes a full P&L payoff chart.
The Iron Condor Strategy
An iron condor is a four-leg options strategy that profits when the underlying stays within a defined price range until expiration. It consists of selling a put spread below the current price and selling a call spread above it — collecting premium on both sides.
The four legs:
| Leg | Action | Position |
|---|---|---|
| Long put (P0) | Buy | Lowest strike — limits downside loss |
| Short put (P1) | Sell | Lower-middle strike — collect premium |
| Short call (C1) | Sell | Upper-middle strike — collect premium |
| Long call (C2) | Buy | Highest strike — limits upside loss |
Strike order: P0 < P1 < stock price < C1 < C2
Key metrics:
Net Credit = (Short Put Premium − Long Put Premium) + (Short Call Premium − Long Call Premium)
Max Profit = Net Credit (stock expires between P1 and C1)
Max Loss = Wing Width − Net Credit (where Wing Width = P1 − P0 = C2 − C1, assuming equal-width wings)
Lower Breakeven = P1 − Net Credit Upper Breakeven = C1 + Net Credit
Profit and loss zones at expiration:
| Stock price at expiry | Outcome |
|---|---|
| Between P1 and C1 | Full profit — keep entire net credit |
| Between P0 and P1 | Partial loss on put side |
| Between C1 and C2 | Partial loss on call side |
| Below P0 | Maximum loss |
| Above C2 | Maximum loss |
When traders use iron condors:
Iron condors work best in low-volatility environments where the stock is expected to stay range-bound. Many traders prefer strikes about one standard deviation away from the current price, with 30–45 days to expiration. Theta decay (time value erosion) benefits this position each day.
Risk management:
Define your max loss before entering. Many traders close the position if it reaches 2x the credit received, rather than holding to max loss. Adjusting one side if the stock threatens a breakeven is common practice.