Long Iron Condor option strategy
Long Iron Condor, also called a Reverse Iron Condor, buys an OTM Put and an OTM Call and sells further OTM options on both sides to cut the cost. It is a defined-risk bet that the underlying makes a big move in either direction.
Payoff at expiry
Nifty, lot size 65 · Nifty future 23,104 · 19 Oct 2026Legs
| Action | Option | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|
| SELL | OTM Put | 23,000 | 1 | 65 | ₹44.79 |
| BUY | OTM Put | 23,050 | 1 | 65 | ₹62.86 |
| BUY | OTM Call | 23,150 | 1 | 65 | ₹65.91 |
| SELL | OTM Call | 23,200 | 1 | 65 | ₹47.40 |
How it works
- Sell 1 OTM put at the 23,000 strike for ₹44.79, collecting the premium.
- Buy 1 OTM put at the 23,050 strike for ₹62.86, paying the premium.
- Buy 1 OTM call at the 23,150 strike for ₹65.91, paying the premium.
- Sell 1 OTM call at the 23,200 strike for ₹47.40, collecting the premium.
- You pay a net ₹2,378 upfront for the position. This is the most you can lose.
Below 23,013 you profit, up to ₹872.
Between 23,013 and 23,187 you lose, up to ₹2,378.
Above 23,187 you profit, up to ₹872.
Set-up: Sell 1 lot deep OTM Put, Buy 1 lot OTM Put, Buy 1 lot OTM Call and Sell 1 lot deep OTM Call with same expiration date.
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,700 | −6% | +₹872 |
| 22,400 | −3% | +₹872 |
| 22,850 | −1% | +₹872 |
| 23,100 | Unchanged | −₹2,378 |
| 23,350 | +1% | +₹872 |
| 23,800 | +3% | +₹872 |
| 24,500 | +6% | +₹872 |
How the Greeks affect it
When to use
When you expect a sharp move but are unsure of the direction, such as ahead of results or an event, and want a cheaper, capped alternative to a strangle.
- Profits from a big move either way.
- Cheaper than a long strangle.
- Both profit and loss are defined upfront.
Things to watch
- Profit is capped beyond the outer strikes.
- Time decay works against it if the move is late.
- Four legs means more brokerage and slippage.
Long Iron Condor: questions
What is a Long Iron Condor strategy?
Long Iron Condor, also called a Reverse Iron Condor, buys an OTM Put and an OTM Call and sells further OTM options on both sides to cut the cost. It is a defined-risk bet that the underlying makes a big move in either direction.
When should you use a Long Iron Condor?
When you expect a sharp move but are unsure of the direction, such as ahead of results or an event, and want a cheaper, capped alternative to a strangle.
How do you set up a Long Iron Condor?
Sell 1 lot deep OTM Put, Buy 1 lot OTM Put, Buy 1 lot OTM Call and Sell 1 lot deep OTM Call with same expiration date.
What is the maximum profit of a Long Iron Condor?
Limited to the difference between the adjacent strikes less the net debit, earned when the underlying moves beyond either outer strike.
What is the maximum loss of a Long Iron Condor?
Limited to the net debit paid, if the underlying stays between the two bought strikes at expiry.
What is the breakeven of a Long Iron Condor?
With Nifty at 23,104, the example on this page breaks even at 23,013 and 23,187 at expiry.
Watch: Long Iron Condor videos
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