Condor (options)

[2] Therefore, long condors are used by traders who expect the underlying to stay within a limited range (low volatility), while short condors are used by traders who expect the underlying to make a large move in either direction.

[3] A long condor consists of four options of the same type (all calls or all puts).

[1] At expiry, a condor's value will be somewhere between 0 and the difference between the two higher (or two lower) strike prices.

[1] It achieves its maximum profit if the underlying is between the two inner strike prices at expiry, and it expires worthless if the underlying is outside the two outer strike prices (in the latter case the buyer's loss is the premium paid to enter the position).

[3] A condor can be thought of as a spread of two vertical spreads,[5] as a modification of a strangle with limited risk,[1] or as a modification of a butterfly where the options in the body have different strike prices.

Example payoff diagram of a long condor: at expiry, if the underlying is at a high or low value, the buyer of the condor loses the premium, but if the underlying is at a value near or between the inner strikes, the buyer makes a profit.