Iron Condor Calculator

Iron Condor Profit/Loss Calculator

Maximum Profit: $0.00

Maximum Risk: $0.00

Risk/Reward Ratio: 0:0

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Lower Breakeven: 0.00

Upper Breakeven: 0.00

function calculateIronCondor() { var lp = parseFloat(document.getElementById('longPutStrike').value); var sp = parseFloat(document.getElementById('shortPutStrike').value); var sc = parseFloat(document.getElementById('shortCallStrike').value); var lc = parseFloat(document.getElementById('longCallStrike').value); var credit = parseFloat(document.getElementById('netCredit').value); var qty = parseInt(document.getElementById('contracts').value); if (isNaN(lp) || isNaN(sp) || isNaN(sc) || isNaN(lc) || isNaN(credit) || isNaN(qty)) { alert("Please fill in all fields with valid numbers."); return; } var putWidth = sp – lp; var callWidth = lc – sc; var maxWidth = Math.max(putWidth, callWidth); var maxProfit = credit * 100 * qty; var maxRisk = (maxWidth – credit) * 100 * qty; var lowerBE = sp – credit; var upperBE = sc + credit; var rr = (maxRisk / maxProfit).toFixed(2); document.getElementById('maxProfitRes').innerHTML = '$' + maxProfit.toLocaleString(undefined, {minimumFractionDigits: 2}); document.getElementById('maxRiskRes').innerHTML = '$' + maxRisk.toLocaleString(undefined, {minimumFractionDigits: 2}); document.getElementById('lowerBERes').innerHTML = lowerBE.toFixed(2); document.getElementById('upperBERes').innerHTML = upperBE.toFixed(2); document.getElementById('rrRatio').innerHTML = "1 : " + rr; document.getElementById('condorResults').style.display = 'block'; }

Understanding the Iron Condor Strategy

An Iron Condor is a non-directional options strategy that profits when the underlying asset experiences low volatility. It involves selling a bear call spread and a bull put spread with the same expiration date.

The Four Legs of the Trade

• Long Put: Protects against a massive downward move.
• Short Put: The lower income-generating strike.
• Short Call: The upper income-generating strike.
• Long Call: Protects against a massive upward move.

Profit and Risk Mechanics

Your goal is for the underlying asset price to stay between the Short Put and Short Call strikes at expiration. If it does, all options expire worthless, and you keep the entire net credit received as profit.

Maximum Profit: The net credit received when entering the trade (Credit x 100 x Contracts).

Maximum Risk: The width of the widest wing minus the net credit received. Since you can only lose on one side (up or down) at expiration, the risk is capped by the spread width.

Breakeven Points

There are two breakeven points for an Iron Condor:

1. Upper Breakeven: Short Call Strike + Net Credit
2. Lower Breakeven: Short Put Strike – Net Credit

Example Scenario:
If you sell an Iron Condor on stock XYZ trading at $410:

• Sell $420 Call / Buy $430 Call (Call Spread Width = 10)
• Sell $400 Put / Buy $390 Put (Put Spread Width = 10)
• Net Credit Received: $1.50 ($150 per contract)
• Max Profit: $150
• Max Risk: (10.00 – 1.50) x 100 = $850
• Profit Range: $398.50 to $421.50