Glossary · Options

Iron condor

Selling a put spread below and a call spread above the price, for a credit.

Why it matters

Profits if the stock stays in a range. Loss is capped by the wings, and only one side can lose at expiration.

How to read it

Works best when IV rank is high and no earnings fall inside the expiration.

Related

Vertical spreadBuying one option and selling another of the same type and expiration at a different strike.IV rankWhere today’s implied volatility sits between its lowest and highest level of the past year, from 0 to 100.Credit and debitA debit trade costs money up front; a credit trade pays you up front.

In the Cluenex app, this explanation opens next to every iron condor figure, with the live reading for the stock you are looking at. Open it in Cluenex