Condor Spread: Wide-Range Neutral Strategy 2026
A condor spread is similar to a butterfly but uses four different strike prices instead of three, creating a wider profit zone. Unlike an iron condor (which mixes calls and puts), a condor spread uses all calls or all puts. It's a defined-risk neutral strategy that profits when the stock stays within a broad range.
What Is a Condor Spread?
A condor spread uses four options of the same type (all calls or all puts) at four consecutive strike prices. For a long call condor: buy 1 lowest-strike call, sell 1 lower-middle-strike call, sell 1 upper-middle-strike call, and buy 1 highest-strike call.
The two middle strikes create a wider "body" compared to a butterfly's single center strike. This wider body means the condor profits across a range of prices rather than at a single point. The tradeoff is that the maximum profit is lower than a butterfly — you're paying for a wider sweet spot.
A condor is essentially two vertical spreads: a bull call spread (lower two strikes) combined with a bear call spread (upper two strikes). The debit from the bull spread is partially offset by the credit from the bear spread, resulting in a net debit for the overall position.
Example: Stock XYZ is at $100. You build a call condor: buy 1 $90 call for $12.00, sell 1 $95 call for $8.00, sell 1 $105 call for $3.00, buy 1 $110 call for $1.50. Net debit: ($12.00 + $1.50) - ($8.00 + $3.00) = $2.50 ($250). If XYZ closes anywhere between $95 and $105 at expiration, the bull spread is worth $5 and the bear spread is worthless = $5 - $2.50 debit = $2.50 profit ($250). Below $90 or above $110, you lose the full $2.50 debit ($250).
When to Use It
- When you expect a stock to trade in a defined range but want a wider profit zone than a butterfly
- On index options where you expect low volatility and range-bound trading
- When you want defined risk on both sides with a known max loss
- As an alternative to an iron condor when you prefer using a single option type (all calls or all puts)
- When you want a moderate-probability, moderate-reward neutral trade
How to Set It Up
1. Identify the range you expect the stock to stay within — these become your two middle strikes 2. Buy 1 call at the lowest strike (below the expected range) 3. Sell 1 call at the lower boundary of the expected range 4. Sell 1 call at the upper boundary of the expected range 5. Buy 1 call at the highest strike (above the expected range) 6. Equal wing widths: the distance between strikes 1-2 should equal the distance between strikes 3-4 7. Select 30-45 DTE for optimal time decay on the short legs 8. Close at 50% of max profit
Risk & Reward
Max profit: Width of one wing - net debit paid. Occurs when stock is between the two middle strikes. In the example: $5 - $2.50 = $2.50 ($250). | Max loss: Net debit paid. Occurs when stock is below the lowest strike or above the highest strike. In the example: $2.50 ($250). | Breakeven: Lower breakeven = lowest strike + net debit ($92.50). Upper breakeven = highest strike - net debit ($107.50).
Best Brokers for This Strategy
Tastytrade offers one-click condor order entry and free-to-close pricing for taking profits early. IBKR has the best fills on four-leg orders and the lowest per-contract commissions. thinkorswim/Schwab provides excellent probability analysis and risk graphing for condor spreads. See our best options brokers guide.
Not financial advice. Always do your own research.
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