IRON CONDOR - SPX

In this case, we combine both BULL PUT Credit & BEAR CALL Credit together

If you want to read about Bull Put or Bear Call credit spreads, read the other postings below.

Execution of trades can be done in several ways – bottom line is you will have 4 legs of trade.

You can exit from each side when either the Bull Put or Bear Call is making money or just let it expire. Key point is that we prefer the stock to trade between the SHORT positions.

In this example you make money & keep the credits from ea vertical trade.

Look at the diagram. If something goes wrong, it will go wrong for 1 side only, either SPX will go to right side or left side. So you simply close that one side position by buying back the short position you sold at or near the expiration. For such IRON Condor trade, you definitely keep the credit for 1 end or if it stays between the 2 Short sale positions, you keep the credit from both sides.

Max profit will be realized when SPX will remain between 1425 & 1245
Profit = .60 + .55 = 1.05
Margin = $5
So, % return will be 20%

If you trade 10 contracts, margin/risk=5K & Credit=1050/-
Similarly, for 5 contracts, margin/risk=2.5K & Credit=525/-