Multi-leg strategies
What is a Reverse Iron Condor and when should it be deployed ahead of major news catalysts?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
A Reverse (long) Iron Condor buys the inner options and sells the outer ones, profiting from a large move in either direction, often used ahead of anticipated volatility-expanding events.
How it works
Because it is a net debit position, maximum loss is limited to premium paid, while profit increases if the underlying moves sharply outside the inner strikes before expiration.
An example
Ahead of an earnings report, a trader buys the 100 call/put and sells the 105 call/95 put for a net debit, profiting if the stock moves sharply post-earnings.
Risk & limitations
Implied volatility typically collapses after the catalyst passes, which can offset directional gains; if the move is too small, the position can lose its full premium.
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.