Condors & iron butterflies
A big move, either way
Debit
Risk: Defined both ways
Reverse iron condor
Also called: Long iron condor
Buy an out-of-the-money put spread and an out-of-the-money call spread: a capped bet on a break out of the range.
Payoff sketch (per unit, index points)
At expiry
Today (7 days left)
Net premium
Debit 102 pts
Max profit
+98 pts (₹6,386 per lot)
Max loss
−102 pts (₹6,614 per lot)
Breakeven
24,698 / 25,302
How it works
A long strangle with the far tails sold to cut its cost. It pays the full wing width minus the debit if the underlying ends beyond either outer strike.
Its expiry payoff is the exact mirror of the iron condor's; charges are paid on all four legs either way.
When traders use it
- Expecting a break out of a range, with both cost and gain capped.
Greeks
| Delta | Near zero at entry. |
| Gamma | Positive between the inner strikes. |
| Theta | Negative. |
| Vega | Positive. |
Profit, loss and margin
| Max profit | (Wing width − net debit) × quantity, beyond either outer strike. |
| Max loss | The net debit plus charges, between the inner strikes. |
| Breakeven | Inner call + net debit; inner put − net debit. |
| Margin | Little beyond the debit once the long legs are in. |
In India
- SPAN margins the whole position, so a defined-risk spread usually blocks far less than its short leg alone. Brokers grant the hedge benefit only when the protective leg is actually in the account, which is why the long leg is usually placed first.
- A long option that finishes in the money is exercised automatically. STT is then charged on its intrinsic value at the exercise rate (0.15% from 1 April 2026 in Arthfy's cost model), instead of the sale rate on the premium (also 0.15%) that applies when the option is sold before the close. See the lesson on the STT exercise trap.
- Since 20 November 2024 each exchange keeps one weekly index expiry: NIFTY on NSE and SENSEX on BSE. Since September 2025 NSE contracts expire on Tuesdays and BSE contracts on Thursdays. BANKNIFTY, FINNIFTY, MIDCPNIFTY and stock options expire monthly (NSE on the last Tuesday). A holiday moves the expiry to the previous trading day.
Arthfy numbers
Before charges, its history is the iron condor's with the sign flipped; see the iron condor page. See Iron condor.
Try it in the F&O hub
Opens the tool with this structure on today's NIFTY chain. Reading is free with an Arthfy account; some runs use free attempts.Open in the builderPayoff, Greeks, scenario grid and charges on today's NIFTY chain
Backtest since 2016Daily data, every NIFTY expiry
Replay on expiry daysMinute data since October 2024
Open the option chainLive premiums, IV and Greeks
