The condor spread is similar to the butterfly spread, with uneven strike prices. This strategy is used when an investor has a volatile outlook on the market. It is equivalent to buying a bull call spread and a bear put spread with uneven strike prices on the short legs.  

Debit spread

The iron condor spread is essentially the opposite strategy to this condor spread. Similar to the iron condor, there is a wider profit zone than the butterfly version. These condor spreads are the favorite for those who want a wide profit zone. Take for example a market that has wide volatile swings. You would purchase one call, and one put with different strike prices, and then write one call and one put on the outer legs with different strike prices. The combination of the four options spread will create a net debit spread.

Condor spreads are net debit; the iron condors on the other hand are net credits. The condor spread can be purchased using puts or calls; either strategy will yield the same results. 

High costs

One important drawback to this strategy is the high commissions charged because of the many transactions. What's more, the spread does not need a major move in the markets to receive a profit. Many brokers unethically recommend this type of strategy to a client because of the many transactions.

The most profitable scenario for the condor spread is for market to stay between the two middle option strike prices. The maximum loss on the other hand is when the market trades outside of the two middle option strike prices. The overall money risked is the debit that was paid to initiate the position. The key difference between this strategy and the butterfly spread lies in the body. Compare the advantages to the disadvantage of the condor spread:

Advantages Of Condor Spread

  • Wide profit zone
  • Limited risk
  • Defined maximum loss and profit zones
  • Customizable profit ranges
  • Profitable during slow markets


  • High costs
  • Lower max profit potential than other strategies
  • Higher maximum loss potential than other strategies

There are other options strategies that allow for market neutral profiteering. You can also use the sister options strategy to the condor spread which is the butterfly spread. At any rate, this must be done with a discounted commission charge or else the small margin of profitability is lost to the cost of transactions.

Speak with your broker or a trading expert before trying to accomplish this spread because some trading platforms may simply be too weak for this type of trading. Certain commodities exchanges and platforms allow for ease of research and tracking. Advanced spreads, such as, the condor spread or the iron condor spread are usually the easiest to track. Make sure to have a platform that allows for ease of trading with trading strategies.

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