Iron Condor
The King of High-Probability Income
Sell premium on both sides of the market — collect cash when the stock stays inside your range. The #1 strategy for consistent monthly income in sideways or range-bound markets.
Iron Condor = Credit Spread Sandwich
Sell Put Spread
Bearish credit spread
Total credit received
Sell Call Spread
Bullish credit spread
Max loss known on day 1
Live Example: SPY Iron Condor (45 DTE)
SPY = $578 | IV Rank = 18 (low → cheap options)
Put Credit Spread (Bearish)
Sell $560 put → +$4.80
Buy $550 put → −$2.10
+$270 credit
Call Credit Spread (Bullish)
Sell $595 call → +$4.20
Buy $605 call → −$1.90
+$230 credit
Total Credit
Range: $560 – $595 (6% wide)
85–90 % probability of profit
+$500 Profit
All four options expire worthless
You keep 100 % of credit
Iron Condor Math: Breakeven, P/L, Probability
$555 & $600
Short strike ± credit received
+$500
Credit received
$4,500
Width of wider spread − credit
Key Formulas
Upper Breakeven = Short call strike + Credit
Iron Condor Golden Rules
Only enter when IV Rank < 30 (cheap options)
45–60 DTE = sweet spot
Wings 5–15 points wide (risk/reward balance)
Close at 50 % profit or 21 DTE
Never hold through earnings or FOMC
Use on SPX, NDX, or high-liquidity ETFs
Adjust or close if breached early
Quick Quiz – Iron Condor
1. An iron condor consists of how many legs?
2. You collect $5 credit on a $10 wide iron condor. Max profit and loss?
3. Best time to enter an iron condor?
4. True or False: Iron condors have undefined risk.
5. You should close an iron condor when:
Answers
- 4
- +$500 / −$1,000
- When IV Rank is low (< 30)
- False — risk is 100 % defined
- It hits 50 % profit
Iron Condor Adjustment Playbook
Pros don't just "hope" — they adjust. Here are the 5 most powerful fixes.
1Roll the Tested Side
Most common & powerful fix
- Stock breaches your short put or call?
- Buy back the entire tested spread
- Re-sell it 1–3 strikes further out (same expiration or next week)
- Often collect extra credit → lowers or eliminates original loss
2Invert the Tested Side
Turn a loser into a winner
- Short put spread now deep ITM?
- Buy back short put + long put → close for loss
- Immediately sell a new call credit spread above current price
- Now you're rooting for the original move!
3Turn It Into a Broken-Wing Butterfly
Eliminate one side's risk
- Tested side hurting? Widen the untested spread
- Move the long leg so far that max loss on that side = $0
- Now you can only lose on one side
4Lock Profit & Re-Center
When you're already up big
- Take 70–80 % profit early
- Re-open a new balanced iron condor centered on current price
- Collect fresh premium again
5Just Close It
Sometimes the best adjustment is none
- Take a small loss
- Wait for IV to drop and market to stabilize
- Re-enter with better pricing
30-Second Decision Tree
Early breach?
→ Roll tested side
Big fast move?
→ Invert it
Already profitable?
→ Lock + re-center
Iron Condor FAQ
Apply This on Treeova
Iron condors are a premium-selling strategy that profits in range-bound markets. Automate the setup on Treeova.
Check Market Conditions
Verify that IV percentile is elevated (>50) and the stock appears range-bound with no major catalysts ahead.
Structure the Trade
Select 16-delta wings with 30-45 DTE. Ensure the credit received provides adequate risk-reward for the defined-risk spread.
Deploy Monitoring Agent
Use the prompt-based strategy builder to automate entry signals and risk management alerts.
💡 Example Prompt
"Build an iron condor agent for SPY. Enter when IV percentile is above 50 and VIX is between 15-25. Use 16-delta wings, 30-45 DTE. Set auto-alerts for 25% profit target and 2x loss stop. Run analysis every market day at 10:00 AM."