Condor Spread

A condor has a wider profit zone (plateau between two middle strikes) while a butterfly has maximum profit at only one strike. If you're not confident about the exact price, a condor gives you more margin for error. The trade-off is potentially lower maximum profit.

A condor is entered for a net debit. The cost depends on strike width and option prices. Typically, expect to pay S$0.20-0.80 per share (S$200-800 per condor) depending on the underlying and strike configuration.

If the stock moves below the lowest strike or above the highest strike at expiration, you lose the entire net debit paid. However, this is your maximum loss - it's defined risk. You can also close early to limit losses.

Yes, you can construct a put condor with 4 put options. Due to put-call parity, a call condor and put condor at the same strikes have the same payoff at expiration. Choose based on liquidity and pricing.

Close when: (1) You reach 50-75% of max profit, (2) Loss reaches your stop level (typically 50% of max profit), (3) Stock breaks beyond outer strikes, or (4) 14-21 days before expiration to avoid gamma risk.

Strike width affects cost, profit zone, and risk/reward. Narrower widths cost less with better risk/reward but smaller profit zone. Wider widths cost more with larger profit zone but potentially worse risk/reward. Match width to your confidence in the range.

Both are 4-leg neutral strategies. A condor uses all calls or all puts (debit entry). An iron condor uses both calls and puts (credit entry). They can have similar payoffs. Choose based on pricing, liquidity, and preference for debit vs credit strategies.

Condors have negative vega in the profit zone. IV decrease helps your position; IV increase hurts it. Enter when IV is elevated (above 50th percentile) and expect it to decline. Close if IV spikes unexpectedly.

Generally no. Close by 14-21 DTE to avoid increased gamma risk. Near expiration, small stock movements can dramatically change your P/L. Taking 50-75% of max profit early is usually better risk management.

Options include: (1) Close the entire position, (2) Close the threatened side only, (3) Roll the entire condor to center on current price, or (4) Add a small directional position to hedge. Choice depends on your outlook and remaining time.

Calculate expected move as ATM straddle price × 0.85. Place middle strikes within this range and outer strikes beyond it. This gives you approximately 60-70% probability of profit, as the market is pricing in movement within that range.

Skew affects relative pricing of calls vs puts. Steep put skew means OTM puts are expensive, potentially making put condors more expensive than call condors. Compare both structures and choose the better deal based on current skew.

Condors have negative gamma in the profit zone. As expiration approaches, gamma increases, making the position more sensitive to movement. Close before 14 DTE when possible. Monitor gamma and close if it becomes uncomfortably large.

Use condors as neutral income generators. Diversify across uncorrelated underlyings. Limit total condor exposure to 10-15% of portfolio. Balance short vega from condors with some long vega positions. Use market (STI) condors for broad exposure.

Convert if the stock has settled at a specific price and you want to concentrate profit potential. Close the outer wings and keep the middle positions. This works best when the stock is near the center of your profit zone with time remaining.