

So the net gains or the net credit for the trader will be Rs. Let us assume the lot size of Nifty options is 50. In the above case, the net premium received by the trader will be Rs. Sell a Call Option at a Nifty level of 17200 (at the premium of Rs 40).Sell a Put Option at a Nifty level of 16800 (at the premium of Rs 40).Buy a Call Option at a Nifty level of 17400 (at the premium of Rs 20).Buy a Put Option at a Nifty level of 16600 (at the premium of Rs 20).Let us consider the current level of Nifty for this example and create an iron condor at this level 17000. Traders can buy or sell NIfty options that have a weekly expiry and take an iron condor options strategy on the same. Let us consider trading on the Nifty Index. The iron condor strategy can be explained with the following example in a better way. The strategies used by the trader in an iron condor are a four point plan where they will have to open the following positions. This includes the bull call spread and bear put spread. Iron condor options strategy allows the trader to open four positions. Traders can manage this strategy to adjust as well as limit any chance of an excess loss-making position.Traders can be well aware of the maximum profits that can be made by them and the amount that they can lose.Traders can make the best out of low volatility market conditions and extract a profitable position from the same.Some of the key benefits of this strategy are mentioned below. Iron condor strategy is often used by traders as a low-risk strategy. What are the benefits of the iron condor strategy? However, there is no obligation for the same as in the case of future or forward contracts.Īn iron condor is essentially a four-legged trading technique the uses four types of call put options strategies to take maximum advantage of the low volatility of the financial markets. It is to be noted that these options can be exercised by the traders before the expiry of such options.

A call option is an option to buy the shares whereas a put option is an option to sell. To understand this strategy, it is important the basics of options trading which include call and out options. The iron condor is an options strategy that requires a combination of bullish views and bearish views to make a strategic position. Given below is the meaning of iron condor and the related details for adopting this strategy to make a profitable trade.
