Iron Condor


Iron Condor

In options, a strategy in which four contracts are bought or sold at four different strike prices. In a call iron condor, the investor buys the calls with the highest and lowest strike prices and sells the calls with the middle strike prices. In a put iron condor, the investor sells the contracts with the highest and lowest strikes and buys the middle ones. An investor engages in an iron condor strategy if he/she expects a great deal of volatility on the underlying asset; it allows him/her to make a profit regardless of the price of the underlying so long as it remains in a certain (broad) range. See also: Butterfly spread.