Iron Condor
Range-bound, defined risk
A short strangle with both wings bought back further out: the defined-risk way to sell premium without open-ended exposure on either side.
Payoff at expiry
Illustrative · NIFTY @ 25000Max Profit
₹4,376
Max Loss
₹3,124
Breakeven
24842 / 25158
How it's built
Sell an OTM put and OTM call (the short strangle), then buy a further OTM put below and a further OTM call above as protection. Four legs, one ticket, and the max loss is fixed the moment it's placed.
When to deploy it
The classic range-bound income trade for a session where Aegis and Zenith both look solid and neither wall is migrating. It is DeltaK's Protocol Alpha regime in spirit, even run manually. You give up some of the short strangle's premium to buy the wings, and get a hard ceiling on loss in return.
Worked example
Say NIFTY is trading around 25,000 with a few sessions left before expiry. You buy the 24800 put for ₹36, sell the 24900 put for ₹66, sell the 25100 call for ₹66, and buy the 25200 call for ₹37 — a net credit of ₹4,376 for one lot of 75.
At expiry, the position is worth the most once NIFTY is on the right side of 24842 or 25158 — up to ₹4,376 per lot. Move against that line instead and the worst case is capped at ₹3,124 per lot, not open-ended.
Mistakes that break this strategy
- Setting the wings so close to the short strikes that the credit collected barely covers the width, making the risk/reward asymmetric against you.
- Forgetting all four legs need managing together. Closing only the short side and leaving the long wings open defeats the structure.
- Treating it as a market-neutral free lunch. A condor sold with skewed strikes is a bet the range holds where you think it will, not where the market thinks it will.
More neutral strategies
See it read live, not just diagrammed
DeltaK reads Aegis/Zenith wall migration and RRG rotation live across NIFTY, BANKNIFTY, FINNIFTY and MIDCPNIFTY. Sign in and watch it work in Paper mode.