Weekly iron condor at 1.5 SD
This is a short-dated NIFTY iron condor whose strikes are placed by volatility, not by a fixed number of points. Near the close, three trading days before the Tuesday weekly expiry, it sells a put and a call about 1.5 standard deviations away from the forward price and buys protective wings further out. The idea is to collect premium on a range the market rarely breaks in three sessions.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
In this test the condor's fate was decided by what NIFTY did over the three sessions it was open. The 20 weeks when the index stayed within ±1% all won, adding ₹29,740 before costs. The 18 weeks when it fell more than 1% lost ₹19,209 overall: a fall pushes the index towards the short put, and put premiums swell faster than call premiums shrink. Volatility going in mattered too. Entries after an India VIX close between 11.5 and 14.5 made ₹20,436 over 21 trades, while 15 entries with VIX above 14.5 lost ₹10,439, because nervous markets more often travelled beyond the 1.5 standard deviation strikes.
About this strategy
- Three trading days before the nearest NIFTY weekly expiry, wait until 15:25.
- Read the at-the-money implied volatility and the chain's forward price, then work out a 1.5 standard deviation move for the three days left.
- Sell the put at that distance below the forward (rounded down to a listed strike) and the call at that distance above (rounded up).
- Buy a put and a call a further 2% of the forward away as wings, so the worst case is capped; skip the week if any leg has no quote.
- At 15:25 on each day between entry and expiry, close all four legs if buying the condor back would cost three times the credit received.
- If that check never fires, hold to expiry and settle at the expiry day's last prices; the next condor starts the following week.
Why traders use it
Sizing the strikes by implied volatility keeps the probability of being breached roughly constant: in a calm week the short strikes sit closer, in a nervous week further away. Entering only three sessions before expiry means the options are in their fastest stretch of time decay, and the bought wings turn an open-ended short strangle into a defined-risk trade with lower margin. The loose 3x-credit stop is meant to let normal wobbles pass while cutting the rare runaway week.
The year in plain words
From 1 Oct 2025 to 30 Sep 2026 on NIFTY, the condor traded 50 weeks and won 43 of them (86%) for ₹21,694 before costs, a profit factor of 1.46. After ₹20 per order and bid-ask slippage on four legs it kept ₹12,836. The shape is typical of short premium: an average win of about ₹1,595 against an average loss of about ₹6,700, with the worst week near ₹22,400. Five weeks hit the 3x stop and 45 ran to expiry. May 2026 alone lost ₹16,130, wiping out most of the gains from April, the best month at ₹9,870.
What the settings do
Risks
- One bad week can cost several times an average win, as the ₹22,400 worst trade shows.
- The stop is checked only once a day at 15:25 and not at all on expiry day, so an expiry-day breach runs to settlement.
- Positions are held overnight, so gaps can jump past the short strikes before any check is made.
- With four legs per trade, spread and brokerage take a large share of a thin credit; statutory charges are not included in the after-costs figure.
Who it suits
Traders who prefer defined-risk option selling, can hold positions over two or three nights, and are comfortable with a high win rate punctuated by occasional large losses.
Questions traders ask
What does 1.5 SD mean in an iron condor?
It means the short strikes sit 1.5 standard deviations of the expected move away from the current forward price. The expected move comes from at-the-money implied volatility scaled to the days left. Statistically, the index finishes beyond such strikes only occasionally, but fat-tailed weeks happen more often than a normal distribution suggests.
Is the weekly 1.5 SD iron condor profitable?
In this backtest on NIFTY from 1 Oct 2025 to 30 Sep 2026 it made ₹21,694 before costs and ₹12,836 after ₹20 per order and bid-ask slippage, with 86% winning weeks. Statutory charges are not included. One month, May 2026, gave back ₹16,130, and past results do not guarantee future ones.
Why enter only three trading days before expiry?
Time decay is fastest in the final days, so a short window earns a relatively large share of the premium for the risk taken. Counting trading days rather than calendar days keeps the entry correct when a holiday shifts the Tuesday expiry.
Why is the stop set at three times the credit?
A wide stop avoids closing on ordinary noise that usually fades by expiry. It only acts when the trade is badly wrong, when the loss reaches twice the premium collected. The cost is that stopped weeks are expensive and the stop does not protect against moves on expiry day itself.