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Iron condor calculator
An iron condor calculator works out the net credit, max profit, max loss, breakevens and return on risk from the four strikes and premiums, and the profit or loss at expiry at each key price. Switch to a bull put or a bear call spread to calculate one side alone. The results are values at expiry: no early assignment, time value or change in implied volatility.
Iron condor guide: how it works, expiry scenarios and assignment risk
Profit and loss at expiry at the key prices
| Point | Price at expiry | P/L at expiry | Share of max loss |
|---|---|---|---|
| One spread width below the long put | $80.00 | −$350.00 | −100.0% |
| Long put strike | $85.00 | −$350.00 | −100.0% |
| Lower breakeven | $88.50 | $0.00 | 0.0% |
| Short put strike | $90.00 | +$150.00 | 42.9% |
| Midway between the short strikes | $100.00 | +$150.00 | 42.9% |
| Short call strike | $110.00 | +$150.00 | 42.9% |
| Upper breakeven | $111.50 | $0.00 | 0.0% |
| Long call strike | $115.00 | −$350.00 | −100.0% |
| One spread width above the long call | $120.00 | −$350.00 | −100.0% |
How to use it
The formula
Net credit = short put premium − long put premium + short call premium − long call premium, per share; × 100 × contracts in dollars. A bull put or bear call spread uses only its own two legs.
Max profit = net credit − commissions, kept if the stock finishes between the short strikes. Max loss = wider spread width − net credit + commissions, where a spread’s width is the distance between its short and long strikes. Only one side of an iron condor can finish in the money, so the loss is that of the wider side.
Lower breakeven = short put strike − net credit per share and upper breakeven = short call strike + net credit per share, with the commissions taken off the credit. Return on risk = max profit ÷ max loss.
These are values at expiry only. Before expiry the position’s value also depends on time value and implied volatility, American-style options can be assigned early, and commissions for closing or assignment are not included.
Worked example
Illustrative numbers, the same as in the iron condor guide: a stock at $100 with 35 days to expiry. Buy the $85 put for $0.40, sell the $90 put for $1.10, sell the $110 call for $1.00 and buy the $115 call for $0.20, one contract each. The net credit is 1.10 + 1.00 − 0.40 − 0.20 = $1.50 per share, or $150.
Both spreads are $5 wide, so the max loss is (5 − 1.50) × 100 = $350 and the return on risk 150 ÷ 350, about 42.9%. The breakevens are 90 − 1.50 = $88.50 and 110 + 1.50 = $111.50. At $113 at expiry the call spread is worth $3, so the result is (1.50 − 3) × 100 = −$150.
With a commission of $0.65 per contract per leg, opening costs 4 × $0.65 = $2.60: the max profit becomes $147.40, the max loss $352.60 and the breakevens about $88.53 and $111.47. The bull put spread alone (the $85 and $90 puts) collects $0.70: a max profit of $70, a max loss of $430 and a breakeven of $89.30.
Questions
How do you calculate the max loss of an iron condor?
Take the wider of the two spreads’ widths, subtract the net credit and multiply by 100 per contract. With $5 wide spreads and a $1.50 credit, the max loss is (5 − 1.50) × 100 = $350 per iron condor, plus any commissions. The stock can’t finish beyond both short strikes at once, so the two sides’ losses never add up.
How are the breakevens of an iron condor calculated?
Lower breakeven = short put strike − total net credit; upper breakeven = short call strike + total net credit. The credit from both sides offsets a loss on either side, so a $90/$110 iron condor with a $1.50 credit breaks even at $88.50 and $111.50 at expiry.
How do I calculate a put or call credit spread?
Choose the bull put spread (a put credit spread) or the bear call spread (a call credit spread). The max profit is the credit, the max loss is the strike width minus the credit, and the breakeven is the short put strike minus the credit or the short call strike plus the credit.
Does the calculator include early assignment, time value or changes in implied volatility?
No, it shows values at expiry only. Before expiry the position’s value also depends on the time left and on implied volatility, so closing early gives a different result. US stock options are American-style and can be assigned early, most often when a short leg is deep in the money or before an ex-dividend date; the iron condor guide covers those risks.
Which premiums should I enter: bid, ask or mid?
The prices you expect to trade at. The mid price is a common starting point, but each of the four legs has a bid-ask spread. Fills nearer the bid for the options sold and the ask for the options bought give a smaller credit, a larger max loss and breakevens closer to the short strikes.
Is a higher return on risk better?
Not on its own. Short strikes closer to the price collect more credit and raise the return on risk, but the stock is also more likely to reach them. Return on risk and the chance of keeping the credit move in opposite directions, which is why the max loss, not the credit, is the figure to size a position from.
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