Understand the position
Buy a $90 put, sell a $95 put, sell a $105 call and buy a $110 call, one contract each with the same expiration and underlying. Assume total credit $2 per share. Each wing is $5 wide, so maximum expiration profit is $200 and maximum loss $300 before costs.
The favorable maximum-profit interval is $95–$105 at expiration. The break-evens are $93 and $107. With a single nonnegative settlement price and matched expirations, both $5-wide sides cannot be fully in the money at the same expiration; use the wider wing if widths differ.
Read the payoff and try a scenario
Short iron condor: profit and loss at expiration
- Buy $90 put; sell $95 put; sell $105 call; buy $110 call. One each, same expiration; $2 total credit.
- Expiration break-even stock prices: $93 and $107 before costs.
- The plot displays $70–$130 only. Move the control to $0 to examine a stock collapse; the right edge is not an upside bound.
Read the chart data
| Stock price at expiration · USD | Whole position P/L (Net P/L · USD per share) |
|---|---|
| 70 | -3 |
| 80 | -3 |
| 90 | -3 |
| 93 | 0 |
| 95 | 2 |
| 100 | 2 |
| 105 | 2 |
| 107 | 0 |
| 110 | -3 |
| 120 | -3 |
| 130 | -3 |
One contract per option leg; 100 shares where the strategy includes stock. Read the fixed position above before changing the price.
At stock $100, all four options have zero intrinsic value and the $200 credit is retained. At $108, the short $105 call has $3 intrinsic while the $110 call has zero: net P/L is $2 − $3 = −$1 per share, or −$100. At $120, the call spread’s $5 obligation leaves the $300 maximum loss.
Separate expiration economics from live prices
The diagram calculates net profit or loss at expiration with the specified position intact. Before that date, remaining time, implied volatility, rates, dividends and bid–ask spreads affect each leg’s market value. A break-even shown here is an expiration break-even, not the price at which an early closing trade must be profitable.
For an actual position, calculate net execution costs and contract quantities, and verify every leg’s expiration, underlying and deliverable. The examples use one standard 100-share contract per leg. Adjusted contracts can differ; an incomplete or mismatched hedge changes the risk.
Understand the tradeoffs and obligations
The shape is often described as neutral, but it is exposed to movement, volatility changes and execution costs. Four legs mean multiple spreads and fees. A wide profit region on a picture does not establish how likely the stock is to finish there.
The expiration loss bound assumes matching deliverables and intact legs. Early assignment, closing only part of the structure or uncertain exercise near a strike can create different interim exposure. Near expiration, small moves may quickly change position delta. Understand the two vertical spreads before treating the condor as one simple trade.
At expiration the stock is $108. What is the example’s net result?
Show the explanation
The $105 short call owes $3 per share; the other legs have no intrinsic value. The $2 credit offsets part of it: −$1 per share, or −$100 before costs.
Sources and editorial notes
Original explanations and hypothetical examples prepared with AI assistance. Primary reference check dates are listed below. Numerical examples are hypothetical unless explicitly identified otherwise.
- OCC / OIC: Short Condor (Iron Condor)
Position construction and risk tradeoffs. All premiums, strikes, payoff graphics, practice questions and calculations are original fictional examples, not copied charts or performance results. Checked October 17, 2026.
- FINRA / OCC: Understanding Assignment
Exercise, assignment, after-hours risk and broker cutoff considerations. Strategy diagrams assume intact matching positions through settlement. Checked October 17, 2026.