Max-pain iron condor
Most iron condors are centred on the current NIFTY price. This one is centred on max pain, the strike where option buyers as a group would lose the most at expiry. Three sessions before the weekly expiry it sells a call and a put 200 points either side of max pain, buys wings 200 points further out, and holds to expiry unless the index crosses a short strike.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
In this test the condor earned most when NIFTY stayed within 1% of its entry level over the hold: ₹16,894 over 14 trades. When NIFTY fell more than 1% it still made ₹3,102 over 11 trades, but at a lower win rate, because a fall drags the index towards the short put, the side cut by the stop twice. Entries made on quiet sessions earned ₹23,007 over 18 trades, while choppy entry days earned just ₹2,420 over 9. Days after India VIX closed above 14.5 made only ₹2,831 over 10 trades: higher premium came with bigger moves that ate most of it.
About this strategy
- Count three trading sessions back from the nearest NIFTY weekly expiry (a Tuesday) and wait until 10:00 that day.
- Compute max pain for that expiry from the open interest at that moment: the strike at which the total payout to option holders would be smallest.
- Sell the call nearest max pain + 200 points and the put nearest max pain - 200 points; buy a call 200 points above the short call and a put 200 points below the short put.
- Skip the week if max pain is so far from the index that one short strike is already in the money.
- If the index crosses the short call (or short put), buy back that side's short option and its wing; the other side stays on.
- Close whatever remains at 15:15 on expiry day. One condor per weekly expiry.
Why traders use it
Max pain is watched closely by Indian option traders, and many believe the index drifts toward it as expiry approaches because large writers defend their positions. Centring the condor there tilts it toward where the option book is most comfortable rather than where the price happens to be at 10:00. The wings cap the loss and cut margin, and the side stop exits only the threatened half, so the safe half keeps decaying into expiry.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 with default settings, the strategy opened 34 condors, won 62% of them and made ₹24,948 before costs, with a profit factor of 2.65 and a maximum drawdown of ₹8,710. After ₹20 per order and bid-ask slippage it still made ₹18,150. Thirty-two trades ran to the expiry-day exit; only two were cut by the side stop, both on the put side. May was the worst month, losing ₹4,690, and June the best at ₹7,218. The four months from June to September made over ₹22,000 between them, so the year's profit was concentrated late.
What the settings do
Risks
- Max pain moves every day as open interest changes, so the centre chosen at entry may no longer reflect the option book by expiry.
- The position is held overnight, and a gap through a short strike fills at the opening price, past the side stop's level.
- When max pain is away from spot the condor is lopsided, which is a directional bet many traders do not realise they are taking.
- Expiry-day short options carry extra margin, and the wings cost premium that reduces the credit kept in quiet weeks.
Who it suits
Option sellers comfortable holding a hedged weekly position over two or three nights who follow open interest data. It needs margin for a four-leg NIFTY condor and patience through losing months like May.
Questions traders ask
What is max pain in options?
Max pain is the strike at which option buyers as a whole would lose the most money if the index expired there. It is worked out from the open interest of every call and put of that expiry. Some traders expect the index to drift toward it near expiry, though it shifts every day as positions change.
Is the max pain iron condor profitable?
In this backtest on NIFTY from 1 Oct 2025 to 30 Sep 2026 it made ₹24,948 before costs and ₹18,150 after ₹20 per order and bid-ask slippage, from 34 weekly condors. Statutory charges were not included. Profits were concentrated in June to September, and past results do not guarantee future ones.
How is this different from a normal iron condor?
A normal condor places its short strikes equally either side of the current index. This one places them either side of max pain, so when max pain is below the index the condor leans lower, and when it is above it leans higher. It is a bet that the index will settle near the open-interest centre.
Can I run it as a max pain strangle without wings?
Yes. Turning “Wings” off sells only the two options and keeps the full credit, but the loss is no longer capped. A popular variant enters one session before expiry and closes everything at twice the credit lost; set “Days before expiry” to 1 and “Max loss x credit” to 2 to test it.