Iron Condor Calculator
Model a four-leg iron condor with custom strikes. See net credit, max profit, max loss, and profit zone width.
A neutral credit strategy that profits when the stock stays within a range. Combines a bull put spread and a bear call spread. Max profit equals the net credit received. Max loss is the width of one spread minus the credit.
Strategy Legs
How to Calculate an Iron Condor
An iron condor is a four-leg neutral options strategy that profits when the stock stays within a defined range. You simultaneously sell a put spread below the current price and sell a call spread above it. You collect a net credit upfront — that credit is your max profit if the stock finishes between the two short strikes at expiration.
This is the most popular income strategy for options traders who believe a stock will trade sideways. It works best in low-volatility environments, after earnings when implied volatility drops, or on range-bound indexes like SPY.
The calculator shows the net credit received, max profit (the credit), max loss (width of one spread minus the credit), and the two breakeven prices. The P&L chart shows the profit zone as a plateau in the middle with losses on both sides.
Formula
Net Credit = (Short Put Premium + Short Call Premium) − (Long Put Premium + Long Call Premium). Max Profit = Net Credit × 100. Max Loss = (Width of Spread − Net Credit) × 100.
Example
SPY is at $550 and you expect it to stay between $540 and $560 for the next 30 days.
You sell the $545 put for $2.50, buy the $535 put for $1.00, sell the $555 call for $2.50, and buy the $565 call for $1.00. Net credit = ($2.50 + $2.50) − ($1.00 + $1.00) = $3.00 ($300 per iron condor). Max profit = $300 if SPY stays between $545-$555. Max loss = ($10 − $3) × 100 = $700. Breakevens: $545 − $3 = $542 and $555 + $3 = $558. SPY has a $16 range to stay profitable.
Frequently Asked Questions
What is a good credit percentage for an iron condor?
Most traders aim for a credit that's 25-35% of the spread width. On a $10-wide condor, that's $2.50-$3.50 per spread. Higher credits mean higher probability of the stock breaching a wing, while lower credits mean wider profit zones but less premium collected. The sweet spot depends on your risk tolerance.
How do I manage a losing iron condor?
Three common adjustments: (1) Roll the tested side further out in time for more premium, (2) close the winning side and roll the tested side to a new strike, or (3) close the entire position at a predefined loss (typically 2x the credit received). Most traders set a max loss exit before entering the trade.
What's the best time to enter an iron condor?
Enter when implied volatility is elevated — after earnings announcements, before holiday weekends, or during VIX spikes. High IV means fatter premiums and wider profit zones. As IV contracts after the event, all four legs lose value in your favor. Selling premium in low-IV environments gives you thin credits and tight margins.
Iron condor vs iron butterfly — what's the difference?
An iron butterfly is an iron condor where the two short strikes are the same (ATM). Butterflies collect more credit but have a much narrower profit zone — the stock needs to finish right at the short strike for max profit. Condors have a wider profit zone but lower max profit. Most income traders prefer condors for the extra margin of error.
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Disclaimer: This calculator is for educational purposes only and does not constitute financial advice. Trading involves substantial risk of loss. Past performance does not guarantee future results. Always do your own research and consult with a licensed financial advisor before making investment decisions.