Unit 3 · Level 2 · Iron condors & range trades
Condors: unit review
A condor is two credit spreads (one under the market, one over), paid as one credit, with only one side ever able to lose. Max loss is wing width minus total credit, known at entry. The edge, when it exists, is implied volatility overpricing reality; the danger is the occasional week when reality overshoots. And when a side gets tested, remember: adjustments are new trades, not undo buttons.
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What you get asked
A condor's short strikes are €90 and €110. Where does it earn maximum profit?
The profit zone is a plateau, not a point. Everything between the short strikes at expiry lets all four legs die worthless.
Match the condor concept to its meaning
Vocabulary is half of options fluency. These four terms cover most of what condor traders actually discuss all day.
A condor profits from a market that stays ___ until expiry.
It's a short-volatility position: boredom pays, drama costs. The opposite temperament to the breakout trades in the Trading course.
March 2020: index options implied big moves, then the market moved even more. Condor sellers that month…
Rich premium is not a force field. When realized volatility exceeds implied, sellers lose. The wings just decide by how much. That's precisely what 'defined risk' is for.
What separates a professional range seller from a gambler running the same condors?
Same structure, different discipline. The pro survives the steamroller weeks because the process was built for them in advance. 🐜
The rest of this unit
Selling both tails at once: profiting from boredom, with the risk boxed in.