Overnight iron condor
This is an overnight option-selling trade: near the close each day, sell a small NIFTY iron condor on the next weekly expiry, and buy it back at the same time the following session. The bet is that one night's time decay is worth more than the overnight gap risk. The short strikes sit four strikes out from the money and the wings six strikes out, so the worst case is capped.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
In this test the overnight condor made ₹21,310 over 117 nights when NIFTY stayed within 1% of its entry level, and lost ₹19,567 over 35 nights when it fell more than 1%, wiping out almost all of it. A fall pushes the index towards the short put while put premiums also jump, so one bad night undoes several quiet ones. Calm markets were the worst VIX setting, losing ₹5,016 over 50 trades, because the credit four strikes out was too small to absorb even modest moves; normal VIX between 11.5 and 14.5 made ₹5,026 over 86 trades.
About this strategy
- Each session at 15:15, take the nearest NIFTY weekly expiry that does not expire today.
- Sell the call four strikes above the ATM strike and the put four strikes below; buy the call six strikes above and the put six strikes below. One lot each.
- Skip the session before the weekly expiry, so the trade never ends on expiry day.
- Hold with no stop loss: the position is purely time based.
- At 15:15 on the next trading session, close all four legs, then open a fresh condor at the same time if the rules allow.
Why traders use it
Option prices lose time value every calendar day, including nights and weekends, and sellers who hold overnight collect that decay without watching the market during the session. Entering near the close and exiting the next afternoon is a simple routine that fits around a working day. The bought wings keep the worst overnight gap to a known amount and reduce margin, which makes this a popular 'sell today, buy back tomorrow' option-selling setup.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 with default settings, the strategy sold 191 overnight condors and 61% closed in profit, but it still lost ₹2,629 before costs (profit factor 0.95). Average wins of about ₹402 could not offset average losses of ₹670, and the worst single night lost ₹3,422. Every trade closed at the next-day 15:15 exit, as designed. Each round trip needs eight orders, so after ₹20 per order and bid-ask slippage the loss grew to ₹40,543 and the win rate fell to 46%. October lost ₹5,460 and November made ₹5,255; most months were small either way.
What the settings do
Risks
- The whole trade rests on overnight time decay against gap risk, and a gap through a short strike can lose up to the width between short and wing.
- Eight orders per round trip make trading costs larger than the average profit before costs.
- There is no stop loss, so an adverse intraday move on the exit day is fully absorbed until 15:15.
- A high win rate hides the fact that losing nights are larger than winning ones.
Who it suits
Traders who cannot watch markets during the day and want to study a time-based, hedged overnight selling routine. It needs margin for a four-leg condor every night and a clear view of how much brokerage and spread eat into small credits.
Questions traders ask
What is a BTST iron condor?
It is an iron condor sold near the end of one session and closed the next day, so it is held for about one night. The seller aims to keep one day's time decay on the short options, while the bought wings cap the loss if the market gaps. It is sometimes called overnight or STBT option selling.
Is the overnight iron condor profitable?
Not in this backtest. On NIFTY from 1 Oct 2025 to 30 Sep 2026 it lost ₹2,629 before costs and ₹40,543 after ₹20 per order and bid-ask slippage, despite winning 61% of nights before costs. Statutory charges were excluded. Past results do not guarantee future ones.
Why skip the day before expiry?
A condor opened the session before expiry would be held into expiry day, when short options react sharply to small moves and carry extra margin. Skipping that night keeps every trade on a normal non-expiry overnight. You can switch “Skip pre expiry” off to include those nights.
How much do costs matter for this strategy?
A lot. Each round trip is eight orders, so brokerage alone is ₹160 a day before the bid-ask spread on four option legs. With an average result before costs of about minus ₹14 per trade, costs turned a near-breakeven year into a large loss.