Call Condor: how the position works

A butterfly with its peak stretched into a plateau: buy a low call, sell two calls at separated middle strikes, buy a high call. It pays its maximum across a range rather than at a point, which makes it forgiving where a butterfly is exact. Built entirely from calls, it is the debit-financed equivalent of an iron condor at the same strikes.

Market view: Neutral — range-bound
Opened for: Debit
Maximum profit: (K₂ − K₁) − net debit, held anywhere between K₂ and K₃ at expiry.
Maximum loss: The net debit paid, at or beyond K₁ or K₄.
Breakeven: K₁ + net debit below, and K₄ − net debit above.

How it is built

Buy 1 call at K₁
Sell 1 call at K₂ and 1 call at K₃
Buy 1 call at K₄, with K₁ < K₂ < K₃ < K₄, same expiry

All figures above are quoted per share and settle at expiry. A standard equity option covers 100 shares, so multiply by 100 for a single contract.

Before expiry: the Greeks

Delta near zero when centred, short vega, positive theta. Like the butterfly it converges late, and like the iron condor it has two zones of negative gamma at the inner strikes rather than one at a single centre.

When to use it

When you want a butterfly's risk profile with a wider target zone and you would rather pay a debit than manage the assignment risk of short in-the-money legs. Compare it directly against an iron condor at the same four strikes — by parity they are near-equivalent, so choose on liquidity and on which legs would be in the money.

What goes wrong

Four legs and four strikes: the most execution-sensitive structure on this list.
The maximum profit is capped and the plateau, while wider than a butterfly's peak, is still bounded on both sides.
Slow to develop. Most of the value arrives in the final fortnight.

A worked example

SPY at 580, 35 days out. Buy the 560 call, sell the 575 and 585 calls, buy the 600 call, for a net 4.40 debit.

Net debit paid: $4.40 per share — $440 for one condor
Inner width: $15.00 (575 − 560)
Maximum profit: $1,060 ((15 − 4.40) × 100), between 575 and 585
Maximum loss: $440, at or beyond 560 or 600
Breakevens: $564.40 and $595.60

Commissions, exchange fees, financing and the bid/ask spread are excluded. On a multi-leg position the spread is usually the largest of these.

Common questions

How does this differ from an iron condor?

Mostly in financing. The all-call condor is opened for a debit and the iron condor for a credit, but at the same strikes and expiry put-call parity makes the payoffs essentially identical. Choose on which legs are in the money and where the tighter markets are.

Related strategies

Educational only. This page explains how a structure behaves; it is not a recommendation to trade it. Options and futures carry substantial risk, and short and leveraged positions can lose more than the amount originally invested.