SHORT PUT CONDOR:

SHORT PUT CONDOR:

SELL 1 ITM PUT OPTION (HIGHER STRIKE),

BUY 1 ITM PUT OPTION (HIGHER MIDDLE),

BUY 1 OTM PUT OPTION (LOWER MIDDLE),

SELL 1 OTM PUT OPTION (LOWER STRIKE).

A Short Put Condor is very similar to a short butterfly strategy. The difference is that the two middle bought options have different strikes.

Market Scenario: Market will cross range but not sure in which direction

Risk: Limited

Reward: Limited

BEP:   Upper BEP = Highest Strike – Net Premium

            Lower BEP = Lowest Strike + Net Premium

EXAMPLE:
Entry:

SPOT

5000

	STRIKE	PREMIUM
SELL 1 ITM PUT	5200	284
BUY 1 ITM PUT	5100	221
BUY 1 OTM PUT	4900	124
SELL 1 OTM PUT	4800	90

UPPER BEP: 5200 - 29 = 5171                                             LOWER BEP: 4800 + 29 = 4829

On Exit if:

SPOT	SELL ITM	BUY ITM	BUY OTM	SELL OTM	STRATEGY PAY-OFF
4700	-216	179	+76	-10	29
4800	-116	79	-24	90	29
4829	-84	50	-53	90	0
4900	-16	-21	-124	90	-71
5000	84	-121	-124	90	-71
5100	184	-192	-124	90	-71
5171	255	-221	-124	90	0
5200	284	-221	-124	90	29
5300	284	-221	-124	90	29

Short Put Condor - Strategy Pay-Off