Condor Spread
While many iron condor traders perhaps don’t realize this – when they employ a popular and basic iron condor adjustment strategy of ‘rolling’ they are in fact placing a ‘condor spread’ – which is a spread all unto itself (and different from an ‘iron condor spread’)
A condor spread is a four legged option spread trading strategy which looks much like an iron condor on a trading platform graph – however it is definitely different – as illustrated below.
An iron condor is an option selling trade created out of two credit spreads.
A condor spread on the other hand is a spread created from a debit spread – and a credit spread – and unlike an iron condor which contains both calls and put options – the condor spread is created from either ONLY calls or ONLY puts.
An example of a condor spread…
Purchase 5 103 SPY Put options
Sell out 5 105 SPY Put options
Sell out 5 108 SPY Put options
Purchase 5 110 SPY Put options
When an iron condor trader rolls out a threatened credit spread on an iron condor – they might do this in two separate trades – however – they could do the exact same adjustment simply through placing a condor on that threatened side.
