Iron Condor

Options Spreads Intermediate NIFTY BANKNIFTY FINNIFTY Stock Options

Range-Bound within support and resistance

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Quick Reference

Strategy Type	Defined Risk - Neutral Premium Selling
Market Outlook	Range-Bound within support and resistance
Risk Profile	Limited to Width minus Net Credit on either side
Reward Profile	Limited to Net Credit Received
Time Horizon	Weekly (4 days) or Monthly (21-30 days)
Capital Requirement	SPAN margin Rs.50,000-60,000 per lot, Max loss Rs.1,500-2,500
Best Used When	IV Rank above 50%, clear support/resistance, no upcoming events, expecting low realized volatility

When to Use This Strategy

IV Rank above 50%, clear support/resistance, no upcoming events, expecting low realized volatility

Payoff Diagram

Profit ▲ │ _______________ Max │ / \ Profit│ / \ │______/ \______ 0 ──┼─────/─────────────────────\─────── Price │ / \ Max │___/ \___ Loss │ A B C D ▼ (Long (Short (Short (Long Put) Put) Call) Call) A = Long Put (Far OTM - Protection/Wing) B = Short Put (OTM - Premium Collection) C = Short Call (OTM - Premium Collection) D = Long Call (Far OTM - Protection/Wing)

India-Specific Notes

Trading Hours

Best Entry	After major events when IV is elevated, during consolidation phases
Avoid Entry	Before RBI policy, Budget, Elections (IV will spike further)
Optimal Monitoring	Daily monitoring sufficient - defined risk allows relaxation

Expiry Behavior

Weekly Expiry	Thursday (NIFTY, BANKNIFTY, FINNIFTY)
Monthly Expiry	Last Thursday of month
Expiry Day Tips	Iron Condor benefits from theta decay toward expiry • If price is between short strikes, hold for max profit • Exit early if price breaches either short strike • Wings protect you even on expiry day - less stress than naked

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