Multi-leg strategies
How does the volatility smile/skew alter the symmetry of an Iron Condor's premium collection?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
Volatility skew means puts often carry higher implied volatility than calls at equal distance, so an Iron Condor's premium and probability-based strikes are rarely symmetric around current price.
How it works
To maintain balanced risk, traders may adjust strike distances asymmetrically, placing the put spread further from price than the call spread to account for the skew's effect on probabilities.
An example
With skew present, a 16-delta put might sit 12% below spot while a 16-delta call sits only 8% above spot, reflecting higher IV priced into downside protection.
Risk & limitations
Ignoring skew can lead to an Iron Condor with unintentionally higher downside exposure; skew also shifts over time, so no fixed strike-distance formula remains optimal indefinitely.
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.