Iron condor calculator
An iron condor combines a put credit spread and a call credit spread on the same stock with the same expiration. It has four legs: a short put, a long put, a short call and a long call. The net credit is what you collect when you open it.
How the numbers are calculated
Max profit is the net credit times 100 shares per contract. The put spread width is the short put strike minus the long put strike. The call spread width is the long call strike minus the short call strike.
Max loss is the wider of the two widths minus the net credit, times 100. The lower breakeven is the short put strike minus the net credit. The upper breakeven is the short call strike plus the net credit. Return on risk is max profit divided by max loss.
Iron condor example
Short put $95.00, long put $90.00, short call $105.00, long call $110.00 and a net credit of $1.50 per share.
Max profit is $150.00. Both spreads are $5.00 wide. Max loss is $350.00. Breakevens are $93.50 and $106.50. Return on risk is 42.86%.
Questions about this calculator
What are the four legs of an iron condor?
A short put and a long put with a lower strike form the put side. A short call and a long call with a higher strike form the call side.
What is net credit?
The premium received for the two short legs minus the premium paid for the two long legs, per share.
What is return on risk?
Max profit divided by max loss, shown as a percent.
Why multiply by 100?
One option contract covers 100 shares.
This page is for educational purposes only and is not financial or tax advice.