Multi-leg strategies
What is an Iron Condor and how does it profit from rangebound, sideways asset behavior?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
An Iron Condor sells an OTM call spread and an OTM put spread simultaneously, collecting net premium that is maximized if the underlying stays between the short strikes through expiration.
How it works
The trade combines a short call spread above price and a short put spread below price, profiting from time decay and stable or falling implied volatility while the underlying trades sideways.
An example
With stock at $100, sell a 110 call, buy 115 call, sell 90 put, buy 85 put, collecting a net credit that is kept in full if price finishes between 90 and 110.
Risk & limitations
Max loss can exceed the credit received if price breaks through either spread; there is no guaranteed income, and assignment risk exists on short legs before expiration.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.