Neutral - expecting price to stay within a defined range
| Strategy Type | Condor Spread / Wide Profit Zone Neutral Strategy |
| Market Outlook | Neutral - expecting price to stay within a defined range |
| Risk Profile | Defined Risk (Limited to net debit/credit) |
| Reward Profile | Limited profit within range, wider profit zone than butterfly |
| Time Horizon | Medium-term (typically 30-60 days to expiration) |
| Iv Environment | Best when IV elevated for iron condor (credit); moderate IV for long condor (debit) |
| Breakeven | Inner strikes ± net debit/credit |
| Primary Instruments | FTSE 100 Index options, UK large cap stock options, US-listed UK ADR options |
| Mas Compliance | MAS regulated brokers required; options trading approval needed |
| Trading Hours | FTSE options: London hours 4 PM - 12:30 AM SGT; US ADRs: US hours |
| Contract Size | FTSE 100 options: £10 per point; Stock options: 100 shares typically |
| Settlement | FTSE options: Cash settled; Stock options: Physical delivery |
| Tax Treatment | No capital gains tax for individuals in Singapore |
| Margin Requirements | Defined risk spread; capital efficient |
| Cdp Account | Not required for foreign options; custody with broker |
| Singapore Relevance | Condors provide consistent income from range-bound UK markets with defined risk suitable for conservative approach |
Four-strike strategy with flat profit zone. Iron condor: Sell put spread + Sell call spread = Credit. Long condor: All calls or puts = Debit. Wider profit zone than butterfly but lower max profit.
Bull put spread (below market) + Bear call spread (above market). Receives credit. Max profit = Credit received. Max loss = Wing width - Credit. Profits if price stays between short strikes.
Wing width minus credit received. For 50-point wings with £18 credit: Max loss = £50 - £18 = £32. Occurs if price beyond either long strike at expiration.
50% of credit is standard. Close when position can be bought back for half the credit. Example: £18 credit, close at £9 value. Captures bulk of profit, reduces risk, frees capital.
Range-bound markets, high IV (for iron condors), no expected breakouts, consolidation periods. IV Rank > 30% ensures adequate credit. 30-60 DTE provides good theta.
Debit-based condor using four calls or four puts. Pays debit, max profit = Inner width - Debit. Use when IV low (premium cheap). Positive vega (benefits from IV rise). Opposite dynamics to iron condor.
When short strike breached or delta > 0.25-0.30 on one side. Only if >14 DTE and roll favorable. Roll for credit preferred. <14 DTE usually better to close than adjust.
Inner width: Wider = Higher probability, lower credit. Wing width: Wider = Lower max loss %, lower credit %. Balance based on conviction. Target credit > 30% of wing width.
High IV (>30% rank): Good for iron condors, more credit. Low IV (<20%): Skip iron condors or use long condors. Extreme IV (>80%): Caution, widen strikes, reduce size.
Close iron condor when you can buy it back for 50% of the credit received. Example: Sold for £18, buy back at £9. Captures bulk of profit while reducing gamma risk and freeing capital.
Put skew = Put spread generates more credit, can be wider. Call skew lean = Call spread may need narrower width. Optimal condor often asymmetric. Use surface analysis for best strike selection.
Aggregate risk across all condors: Total delta (should be ~0), aggregate gamma, total capital at risk, correlation between positions. Manage at portfolio level, set limits, monitor daily.
Multiple uncorrelated underlyings (FTSE, individual stocks, sectors). Stagger expirations (laddering). Risk parity allocation. Track aggregate Greeks. Note: Correlations increase in crisis.
Greater than 1.5. With 75% win rate and 1:2 win/loss ratio = 1.5 profit factor. Track over 50+ trades. Lower indicates strategy issues. Higher is better. Profit factor > win rate for assessment.
Extreme IV (>80%): Widen to 10-12 delta shorts, much wider wings, reduce size 50%. High IV for reason (expected move). Better premium but higher move probability. May be better to skip.
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