Long Condor — Options Strategy

A long condor spread is a defined-risk, market-neutral strategy similar to a butterfly but with a wider profit zone. Instead of selling two options at the same middle strike (like a butterfly), you sell options at two different middle strikes—creating a flat-topped profit zone between the inner sold strikes. The wider the gap between the sold strikes, the wider the profit zone and the higher the cost of the trade.

A long condor consists of four legs at four different strikes: buy one option at the lowest strike, sell one at the second strike, sell one at the third strike, and buy one at the highest strike. The maximum profit is achieved when the stock closes between the two sold (inner) strikes at expiration—anywhere in that range yields the full spread profit. This wider profit zone compared to a butterfly comes at a higher debit cost.

Long condors are useful when you have a moderate price range expectation—you believe the stock will end up somewhere between two specific prices but aren't confident enough to bet on a single price (as a butterfly requires). The condor's flat profit zone removes the need for pinpoint accuracy in the price prediction.

The trade-off versus a butterfly is cost: a long condor always costs more (higher debit) because the two different inner strikes generate less premium than the two identical middle strikes of a butterfly. However, the wider sweet spot improves the probability of achieving maximum profit, creating a better balance between cost and likelihood of success.

Management of long condors mirrors butterfly management: the trade benefits from time decay if the stock remains within the inner strikes, and loses if the stock moves beyond either outer long option. Closing at 50-75% of maximum profit is common, and the defined-risk structure means the maximum loss (the debit paid) is always known at entry.