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Chapter 2. Income Strategies > Long Iron Condor

2.6. Long Iron Condor

ProficiencyDirectionVolatilityAsset LegsMax RiskMax RewardStrategy Type
+
   +   
IntermediateNeutralLow• Long PutCappedCappedIncome
   • Short Put   
   • Short Call   
   • Long Call   


2.6.1. Description

The Long Iron Condor is an intermediate strategy that can be profitable for stocks that are rangebound. A variation of the Long Iron Butterfly, it is in fact the combination of a Bull Put Spread and a Bear Call Spread. The higher strike put is lower than the lower strike call in order to create the condor shape. The combination of two income strategies also makes this an income strategy. Traders often will leg into the Long Iron Condor, first trading a Bull Put Spread just below support and then as the stock rebounds off resistance adding a Bear Call Spread, thereby creating the Long Iron Condor.


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