Iron Condor Profit Calculator
An iron condor combines a bull put spread (selling a put, buying a lower-strike put) with a bear call spread (selling a call, buying a higher-strike call). The net premium collected is the maximum profit, earned when the stock price stays between the two short strikes at expiration. The maximum loss occurs when the stock moves beyond either the long put or long call strike, and equals the spread width minus the net credit. This strategy profits from low volatility: when the stock trades in a range. This calculator takes the four strikes and the net credit to compute maximum profit, maximum loss, upper and lower breakevens, return on risk, and break-even width as a percentage of the short strikes.
Iron condor formula
Spread Width = short put strike - long put strike (same for call side)
Max Profit = net credit * 100 (per contract)
Max Loss = (spread width - net credit) * 100
Upper Breakeven = short call + net credit
Lower Breakeven = short put - net credit
Return on Risk = net credit / (spread width - net credit)
The spread widths on each side must be equal (or the formula uses the larger width as the binding constraint). Max loss assumes both spread widths are equal.
Iron condor strategy notes
- Iron condors profit from time decay (positive theta) and declining implied volatility.
- Best deployed in high-IV environments where premium is elevated, giving wider breakeven ranges.
- The probability of max profit approximately equals the probability that the stock stays between the short strikes, which can be estimated from delta of the short strikes.
- Asymmetric condors (different put and call spread widths) are permitted; use the wider spread width for max loss.
- Management: many traders close the position at 50% of max profit to reduce time in the trade and gamma risk near expiration.
Frequently asked questions
What is an iron condor?
An iron condor is a four-leg options strategy combining a bull put spread and a bear call spread. It earns a net credit and profits when the underlying stays within the range between the short strikes through expiration.
How is maximum profit calculated?
Maximum profit equals the net credit received (total premium collected minus premium paid for the long legs). This is achieved when the stock price at expiration is between the two short strikes.
How is maximum loss calculated?
Maximum loss equals the spread width minus the net credit. Spread width is the distance between strikes on either side (e.g. if your put spread is $95/$90, width = $5). Max loss = width - net credit. Multiply by 100 for dollar amount per contract.
What are the breakeven prices of an iron condor?
Upper breakeven = short call strike + net credit. Lower breakeven = short put strike - net credit. The stock must stay between these prices at expiration for the trade to be profitable.
What is the return on risk for an iron condor?
Return on risk = net credit / max loss. For example, a $1.00 credit with a $4.00 max loss gives a 25% return on risk. Comparing return on risk across different expirations and strikes helps identify the best risk-adjusted trade.
Official sources
- Options Clearing Corporation: theocc.com.
- CBOE Options Institute: cboe.com/education.
- SEC Investor Education: sec.gov/investor.
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.