iron condor calculator
Use this iron condor calculator to estimate the potential profit, loss, and breakeven prices of an iron condor
options strategy. Enter your trade details and instantly see how combining a call spread and a put spread performs
across different stock prices at expiration. You can also customize the chart range to visualize outcomes across a
wide range of price movements, making it easier to evaluate range-bound and income-focused strategies.
How to Use the Iron Condor Calculator
How to Use the Iron Condor Calculator
This iron condor calculator helps you analyze trades that profit from price staying within a defined range by selling both a call spread and a put spread on the same underlying stock.
Follow these steps to use the calculator:
-
Enter the stock’s current price
This is the current market price of the underlying stock.
-
Select four option legs
Choose two call options and two put options with the same expiration date. The call strikes are placed above the current price and the put strikes are placed below the current price.
-
Enter the strike prices
Input the strike prices for each leg. The short call and short put define the profit range, while the long call and long put limit risk.
-
Enter the premiums for each leg
These are the prices received or paid for each option contract in the iron condor.
-
Confirm the position structure
An iron condor consists of selling an out-of-the-money call and put, while buying further out-of-the-money options to cap risk.
-
Enter the expiration date
All four option legs must share the same expiration date so the payoff is calculated correctly.
-
Set the chart range
Define the range of stock prices you want to analyze at expiration to visualize breakevens and payoff zones.
-
View your results
The calculator will display maximum profit, maximum loss, breakeven prices, and a profit and loss chart for the full iron condor position.
Understanding the Iron Condor Options Strategy
What Is an Iron Condor?
An iron condor is a neutral options strategy that combines a bear call spread and a bull put spread on the same stock with the same expiration date. The goal is for the stock price to remain between the two short strike prices through expiration.
Iron condors are commonly used in low-volatility environments or when a trader expects limited price movement.
How Does an Iron Condor Work?
The strategy involves selling an out-of-the-money call and an out-of-the-money put while buying further out-of-the-money options on both sides to define risk. The premium received from the short options is greater than the cost of the long options, resulting in a net credit.
Key characteristics of an iron condor:
- Direction neutral with a range-bound outlook
- Maximum profit limited to the total premium received
- Maximum loss capped and known in advance
- Profits when price stays between the short strikes
Maximum Profit and Loss
Maximum profit occurs when the stock expires between the short call and short put strikes. Maximum loss occurs when the stock moves beyond either long strike, with losses capped by the width of the spreads minus the premium received.
When Do Traders Use Iron Condors?
- Expecting low volatility or sideways price action
- Seeking defined-risk income strategies
- Trading options with elevated implied volatility
- Building neutral strategies with limited downside exposure