The Iron Condor Calculator helps you plan a non-directional options strategy designed to generate income in a low-volatility market. It involves four option contracts (two calls, two puts) to define a strict profit zone with limited risk.
How Iron Condor Works
An Iron Condor combines a Bear Call Spread (selling OTM Call, buying further OTM Call) and a Bull Put Spread (selling OTM Put, buying further OTM Put). You collect premium from the short strikes while the long wings protect you from extreme moves.
Max Profit = Net Premium ReceivedWhere:
- • Max Loss = Width of Spread - Net Premium
- • Upper BE = Short Call Strike + Net Premium
- • Lower BE = Short Put Strike - Net Premium
Iron Condor Setup
Nifty @ 18,000.\n• Sell 18,200 Call & 17,800 Put (Short Strikes)\n• Buy 18,400 Call & 17,600 Put (Long Wings)\n• Net Credit: ₹50.\n\nResult: You keep the ₹50 if Nifty stays between 17,800 and 18,200 at expiry.
Iron Condor vs Short Straddle
Income Strategy Comparison:
| Feature | Iron Condor | Short Straddle |
|---|---|---|
| Risk | Limited (Defined) | Unlimited |
| Profit Potential | Lower (Premium - Insurance) | Higher (Full Premium) |
| Margin | Lower (Hedging benefit) | High |
| Adjustments | Harder to adjust | Easier to roll |
Frequently Asked Questions
⚠️ Disclaimer
The figures provided by this calculator are estimates based on the inputs you provide and standard financial formulas. STOCKCALC.IN does not offer investment advice. Please consult a qualified financial advisor before making any investment decisions.