RANGE-BOUND · DEFINED RISK

Iron Condor Strategy. Learn About It. Practice it Here with Zero Risk.

Four legs. One range. A capped loss if the market breaks out. Build the structure on Nifty, BankNifty and Sensex with virtual money before you ever use real capital.

4
Legs, One Combined Position Sell a put spread + sell a call spread, same expiry
Profit Inside a Range You keep the credit if price stays between the short strikes
Loss Is Capped The long options define how far a loss can run
See Payoff Before You Place It Credit, breakevens, max profit and max loss on screen
Execute All Four Legs Together Use a pre-built strategy or a basket — one click, not four fills

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Practice the Iron Condor with ₹5L virtual cash. Real market prices. No demat linking.

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Virtual money only. Market prices are delayed by 30 days. Not investment advice.

  1. THE STRUCTURE

    You Are Selling a Range. The Wings Are Insurance.

    An iron condor is two vertical spreads on the same underlying and expiry: a put spread below the market, and a call spread above it. You receive a net credit to put the whole thing on.

    • Sell an out-of-the-money put, then buy a lower put to cap downside risk
    • Sell an out-of-the-money call, then buy a higher call to cap upside risk
    • The credit you collect is the most you can make if all four options expire worthless
    • Best when you expect the market to stay inside a band — not when you expect a sharp rally or crash
    Same underlying · Same expiry Four orders. One range trade.
    BUYLower PE Protection
    SELLOTM PE Collect premium
    Spot sits here
    SELLOTM CE Collect premium
    BUYHigher CE Protection

    Keep the credit if price stays between the two short strikes at expiry.

  2. A NIFTY WALKTHROUGH

    Read the Credit First. Then Read the Distance.

    The numbers below are a teaching example, not live quotes. Premiums, lot sizes and actual fills change. Use them to see how profit, loss and breakevens are connected.

    • Sold options bring in ₹150. Protective options cost ₹75. Net credit = ₹75
    • Each wing is 200 points wide, so the worst-case loss is about 125 points after the credit
    • Full profit only if Nifty expires between 23,700 and 24,300
    • One max loss wipes out more than one full win — so “often right” is not the same as “good result”
    Nifty near 24,000 Expected range 23,700–24,300
    ActionStrikePrem.
    BUY PE23,500₹35
    SELL PE23,700₹70
    SELL CE24,300₹80
    BUY CE24,500₹40
    Net credit₹75
    Max profit75 pts
    Max loss~125 pts
    Breakevens23,625 / 24,375

    If the lot is 75 units, that is about ₹5,625 max profit vs ₹9,375 max loss before costs. Always check the current contract size.

    EXPIRY MAP

    Where the Trade Makes Money — and Where It Stops

    The original credit is a 75-point cushion. Price can cross a short strike and the position can still be green — until it uses up that cushion.

    Inside 23,700–24,300 Keep the full ₹75

    All four options expire with no intrinsic value. That is the best expiry result.

    Settles 24,340 Still about +₹35

    The short call is slightly in the money. The original credit still covers it.

    Settles 24,420 About −₹45

    The call spread has lost more than the credit. The trade is now a loss, but not yet the maximum.

    24,500 or higher Loss capped ~125 pts

    The long call stops further damage. The put side works the same way in reverse.

    This map is for expiry. Before expiry, remaining time and implied volatility also move the mark-to-market — even if Nifty is still inside your range.

  3. MARKET FIT

    Use It for a Band. Not for a Forecast of a Big Move.

    The structure is short volatility. Rising implied volatility usually works against you. Extra premium before a Budget, RBI decision or election can look attractive — and one gap can still walk through a short strike before you have a clean exit.

    Range-bound

    Short put under your floor, short call over your ceiling. Equal-width wings make the max loss easier to read.

    Mild tilt only

    Expect a modest rise? Slide the whole structure up. Expect a modest dip? Slide it down. It is still a range trade.

    Strong direction

    Skip it. A vertical spread says the same view with fewer legs. An iron condor sells away the move you actually want.

  4. STRIKE SELECTION

    Far Strikes Feel Safe. Tiny Credits Rarely Are.

    • If the credit is too small, brokerage and slippage can eat the trade before the market does
    • A practical start: sell near 10–20 delta, then buy further-out options to cap the loss
    • The at-the-money straddle is a rough “priced move” — not a promised boundary
    • Chart support and resistance can help placement. They do not cap expiry risk after a gap

    Reference, not a forecast

    If Nifty is 24,000 and the ATM call + put for your expiry is about ₹360…

    23,640 Priced move ~360 pts 24,360
    • Outside that band: more room, usually a thinner credit.
    • Inside that band: fatter credit, because the market already sees a real chance of getting there.

  5. HOLDING AND ADJUSTING

    This Trade Earns Slowly. It Can Lose Quickly.

    Time decay is uneven. The position may do very little in the first days, then decay faster near expiry — which is also when gamma rises. A condor that looked quiet at 10am can need a decision after a one-hour swing.

    • Once most of the credit is earned, the last few rupees are often not worth overnight and expiry-day risk
    • Decide the response before entry: full close, threatened-spread close, or a roll
    • Pulling the untested side closer can collect extra premium — and shrink the room you had left
    • The expiry breakeven is not a stop-loss. Remaining premium, days left and IV still matter
    01

    Close the whole condor

    Usually the cleanest move. Directional heat and extra adjustment risk both leave the book.

    02

    Close only the threatened wing

    Removes the side under pressure. The other spread is still live — treat it as a new trade, not leftover luck.

    03

    Roll a strike or expiry

    Can buy time or collect more credit. It also redraws the profitable range. Write the rule before premiums start jumping.

  6. PRACTICE ON NEOSTOX

    Pick Iron Condor. See Every Leg. Know the Risk Before You Click.

    • Choose index or stock, expiry and a range-bound view — Iron Condor is already in the pre-built library
    • Inspect and edit each leg, then read max profit, max loss, breakevens and risk/reward before sending
    • Place all four legs together. Set a target and stop-loss. Repeat with virtual money until the structure feels familiar
    • Start with ₹5L virtual cash. Top up if you need more. No real money, no demat linking
    Neostox prebuilt options strategies including iron condor

Quick Answers

Iron Condor, Asked Clearly

At expiry, when the underlying finishes between the two short strikes so all four options expire without intrinsic value. That maximum is the net credit collected when you opened the trade.

Lower breakeven = short put strike minus the net credit. Upper breakeven = short call strike plus the net credit. Those levels apply at expiry, not as an automatic stop during the life of the trade.

Before expiry, remaining time and implied volatility still price the options. If premiums expand, the mark-to-market can go red even though spot has not left your expected band.

A contained, range-bound market. The position is typically short vega, so a rise in implied volatility usually hurts. A strong directional view is better expressed with a simpler vertical spread.

You can close the full condor, close the threatened spread, or roll part of the structure. Write that rule before entry. Adjustments can collect extra premium and also shrink the remaining profit range.

No. Index options are cash-settled. Stock derivatives can involve physical settlement, delivery obligations and higher margin near expiry. Read the settlement rules before using a stock as the underlying.

Examples on this page are hypothetical and for education only. They are not live prices, trade recommendations or investment advice. Market prices on Neostox are delayed by 30 days. Practice with virtual money.

Practice the Iron Condor on Nifty, BankNifty and Sensex — with virtual money.

₹5L virtual cash to start, real market prices, payoff and risk on screen before you send the four legs. No real capital at risk.