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LONG CONDOR SPREAD
碩財一甲 MA180105 張嘉雯
INTRODUCTION

The Long Condor Spread is an advanced neutral
option trading strategy which profits from
stocks that are stagnant or trading within a
tight price range . It is a cousin of the
butterfly spread but involves 4 strike prices
instead of 3 strike prices, resulting in a much
wider profitable range at the cost of a lower
maximum profit.
LONG CONDOR SPREAD

The choice of which strike prices to buy the
long legs at depends on the range within
which the underlying asset is expected to
trade in.

The further away from the money the 2 long
legs are, the lower the risk, and the lower
the potential profits.

Furthermore, the choice of which strike
prices to buy the two short legs at depends
on how wide you want the range within which
the maximum profit will occur.

The further from each other the two short
legs are, the wider the price range will be
where you will get the maximum profit
potential of the Long Condor Spread at the
cost of a lower maximum profit.

A Long Condor Spread is therefore an
extremely advanced neutral strategy
where a trader gets to control the range
within which the Long Condor Spread is
profitable as well as the range within
which the Long Condor Spread will hit
its maximum profit potential.

You can also skew the risk/reward
profile of the Long Condor spread so
that the position makes a loss only on
one side of the trade, not both,
through the use of a Call Broken Wing
Long Condor Spread or Put Broken Wing
Long Condor Spread.
LONG CONDOR SPREAD EXAMPLE
Call
Buy
7100
570
Sell
7300
382
Sell
7500
230
Buy
7700
115
Net Debit = -570 + 382 + 230 – 115 = -73
(7500-7300)→ 200 – 73 = 127

In the above example, we are expecting
the to trade within a price range of
between 7100 to 7700 upon expiration
and achieving the maximum profit
potential of the Long Condor Spread
when this is within 7300 to 7500.

THE END
Bye Bye ~