Percent-OTM weekly condor
A once-a-week NIFTY iron condor that places both short strikes a fixed 2% away from the index and buys protective wings 150 points further out. It opens on the weekly expiry day itself, using the following week's contract, then either banks half the credit, stops out when the loss reaches 1.5 times the credit, or closes on that contract's expiry day. It is a defined-risk way to sell the weekly range.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
In this test, condors held while NIFTY stayed within 1% won all 31 times and made ₹27,357. The 10 trades held through a fall of more than 1% lost ₹8,578, with only 4 winners, as the short put came under pressure and falling markets tend to lift option prices. The 11 weeks with a rally of over 1% still made ₹5,951, because rallies usually cool volatility and the call side keeps decaying. Entries after an evening with India VIX above 14.5 earned ₹12,230 over 15 trades, against ₹3,172 over 13 calm-VIX trades, as higher volatility brings a bigger credit for the same 2% distance. Choppy entry days made ₹14,303 over 16 trades, quiet ones only ₹1,820 over 19.
About this strategy
- On each NIFTY weekly expiry day at 09:20, take the next weekly expiry, which must be 1 to 7 calendar days away; one condor per weekly contract.
- Estimate the index level from that weekly chain's put-call parity price.
- Sell the put nearest 2% below that level and the call nearest 2% above it.
- Buy a put 150 points below the short put and a call 150 points above the short call; skip the week if the net credit is below the minimum.
- Close all four legs once 50% of the credit has been earned.
- Close all four legs if the loss reaches 1.5 times the credit.
- Otherwise hold overnight through the week and close at 15:15 on the contract's expiry day.
Why traders use it
Setting the short strikes by percentage keeps the distance in step with the index level, and a 2% buffer is wide enough that NIFTY stays inside it in most weeks. The wings cap the worst case and lower margin compared with a naked strangle. Taking profit at half the credit avoids sitting through the riskier last days for the small remaining premium, which is why this target is common among weekly option sellers.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 with default settings, the condor traded 53 weeks and won 45 of them (85%), for ₹26,215 before costs and a profit factor of 2.28. Every win came from the 50% target; six losses hit the credit stop and two ran to expiry. The average win was ₹1,036 against an average loss of ₹2,552, and the worst single trade lost ₹4,167. May was the best month at ₹8,594 and July the worst, a ₹2,265 loss. Four legs in and out each week add up: after ₹20 per order and bid-ask slippage (statutory charges excluded) the profit fell to ₹14,223, a profit factor of 1.62.
What the settings do
Risks
- The position is held overnight, so a gap can push the loss past 1.5 times the credit before the stop can act.
- A single stopped week can erase several weeks of target exits, since losses averaged about 2.5 times the size of wins.
- The defaults are mid-range values, and parameters tuned on past data may not hold in future.
- Four legs per trade make brokerage and spread a large share of the profit, as the after-costs result shows.
Who it suits
Option sellers who want a defined-risk weekly trade they set once and mostly leave alone, with margin for a hedged four-leg position held overnight, and the discipline to accept an occasional loss two to four times the usual win.
Questions traders ask
What is a percent OTM iron condor?
It is an iron condor whose short call and put are placed a fixed percentage away from the index, here 2%, rather than at a fixed point distance or delta. Wings are bought a set number of points beyond each short strike to cap the loss.
Is the weekly NIFTY iron condor profitable?
In this backtest from 1 Oct 2025 to 30 Sep 2026 it made ₹26,215 before costs and ₹14,223 after ₹20 per order and bid-ask slippage, winning 45 of 53 weeks. Statutory charges are not included. Past results do not guarantee future ones, and one bad gap week can change a year.
When is the condor entered each week?
At 09:20 on the NIFTY weekly expiry day, normally Tuesday, into the following week's contract. The rules pick the nearest expiry with at least one day left, which on expiry day is next week's. When a holiday moves the expiry, the entry moves with it.
Why take profit at 50% of the credit?
Most of the risk in a short option position sits in the last days, when gamma is highest, while little premium is left to earn. Closing at half the credit locks in the gain and frees the week. Here all 45 winning trades closed this way.