Neutral Intermediate Defined risk Debit 4 legs

Long Condor

An all-call range trade with a flat top — a butterfly with breathing room.

Quick answer: A Long Condor is a defined-risk neutral strategy built from four call strikes for a debit, paying a flat maximum across the range between its two inner strikes rather than at a single point — a wider, gentler cousin of the long butterfly.

In simple words

A long condor is like a long butterfly with a flat top instead of a sharp peak. You buy a call low, sell two calls at two different middle strikes, and buy a call high, paying a small amount overall. If the market finishes anywhere between the two middle strikes, the position is worth its most — a plateau, not a point — so it is more forgiving than a butterfly about exactly where price lands. If price runs far outside the outer strikes, everything cancels and you lose only the small amount you paid.

Not to be confused with: A long condor built from four calls is a debit and uses a deep in-the-money leg, whereas an iron condor mixes puts and calls for a net credit using out-of-the-money legs. Their payoff shapes are near-identical and they are economically equivalent up to put-call parity and financing; the iron version is preferred in practice for its liquidity.

Payoff diagram

Profit & loss at expiry — Long Condor

Illustrative NIFTY legs, spot 24,000. Every strategy on this site is priced off one arbitrage-consistent option chain, so no two pages imply different option prices. Figures are per unit; one NIFTY lot is 75 units at the time of writing. The dashed line is the position's theoretical value today, before time decay has run.

Leg	Action	Type	Strike	Premium	Qty
1	Buy	Call	23,600	₹711	1
2	Sell	Call	23,900	₹500	1
3	Sell	Call	24,100	₹379	1
4	Buy	Call	24,400	₹231	1

Market outlook

Neutral

Risk

Defined risk

Net flow

Debit

Max profit

₹237/unit · ₹17,775 per lot

Max loss

₹63/unit · ₹4,725 per lot

Breakeven

23,663 and 24,337

Defined risk. The maximum loss is capped by the position's own structure — a long option leg caps every short one — and is known before entry. That cap holds at expiry. Before expiry the position can still mark against you, early assignment on a short leg can break the structure, and on a physically-settled stock option an assignment can leave you holding the underlying.

Professional explanation

Four call strikes, a plateau not a peak

This long condor buys the 23,600 call, sells the 23,900 and 24,100 calls, and buys the 24,400 call — four strikes rather than a butterfly's three. Splitting the short body across two strikes turns the butterfly's single peak into a flat plateau between 23,900 and 24,100. The position is bought for a net debit of 63 per unit, and it pays its maximum anywhere on that plateau. The trade-off against a butterfly is a lower maximum profit in exchange for a wider zone in which that maximum is earned.

Where the maximum and the cap come from

On the plateau the 23,600 long call carries 300 points of intrinsic value against the nearer short, giving a maximum payoff of the wing width minus the debit: 300 − 63 = 237 per unit, ₹17,775 on a lot. The plateau itself runs between the two short strikes, 23,900 and 24,100, which are 200 apart. Beyond the outer strikes the position is flat: below 23,600 all calls expire worthless and the loss is the 63 debit; above 24,400 the two long calls offset the two shorts and the loss is again 63. The two outer long calls cap both tails, which makes the condor defined risk.

Not an iron condor

This is the single most important distinction on the page. A long condor built from four calls is a debit; an iron condor mixes puts and calls and is a credit. Their payoff shapes are almost identical — a flat-topped plateau with capped tails — and up to put-call parity and financing they are economically equivalent. The iron version is preferred in practice because it is assembled from out-of-the-money options, which are more liquid and avoid the deep in-the-money 23,600 call this all-call condor requires. The economics are the same; the execution is not.

A short-volatility structure bought for a debit

Like the long butterfly, the long condor is net short its two body options, so on the plateau it carries negative gamma and negative vega and gains from time decay. It is therefore generally opened when implied volatility is elevated and expected to fall — a decline in volatility lifts it toward its plateau value, while a rise flattens the structure toward the debit. The wider body simply spreads that short-volatility exposure across a range of prices instead of concentrating it at one.

Construction

Buy one lower-strike call (here the 23,600 call) as the lower wing.
Sell one lower-middle call (the 23,900 call) to begin the body.
Sell one upper-middle call (the 24,100 call) to complete the body, creating the plateau.
Buy one higher-strike call (the 24,400 call) as the upper wing, then confirm the net debit and that the wings are equidistant from the body.

Market outlook

A trader may study a long condor when the expectation is that the underlying will stay within a range through expiry and a defined-risk, low-cost expression is preferred, with more tolerance for where exactly price lands than a butterfly allows. It wants a calm market and, being net short its body, benefits from falling implied volatility. The condition that invalidates it is a decisive move beyond an outer strike or a volatility expansion. It is often compared to an iron condor, which expresses the same range view for a credit using more liquid out-of-the-money options.

Risk profile

The long condor is a defined-risk position: the two outer long calls cap the two inner short calls on both sides, so the loss cannot exceed the net debit. That maximum loss is 63 per unit, or ₹4,725 on one NIFTY lot of 75, reached anywhere outside the profit band on either side. Because the profit plateau is wide, the position is more likely to retain some value than a butterfly, but the small loss is still the more common outcome. Before expiry the mark moves with volatility and gamma; there is no undefined tail, and on cash-settled index options there is no assignment risk.

Maximum loss, stated three ways

As a formula: Net debit paid × lot size. Here 63 × 75 = ₹4,725, the most that can be lost, reached anywhere outside the profit band on either side.
Computed from the illustrative legs: ₹63 per unit, i.e. ₹4,725 for one NIFTY lot of 75.
Breakevens: Lower breakeven = lowest strike + net debit = 23,600 + 63 = 23,663. Upper breakeven = highest strike − net debit = 24,400 − 63 = 24,337. → 23,663 and 24,337.

Reward profile

The maximum reward is the wing width minus the debit, times the lot size — (300 − 63) × 75 = 237 × 75 = ₹17,775 — earned anywhere the underlying settles between the two short strikes, 23,900 and 24,100. That plateau makes the full reward easier to reach than a butterfly's single peak, at the cost of a lower maximum. Outside the plateau the reward tapers along the sides to the breakevens at 23,663 and 24,337, beyond which the position loses the debit.

Maximum profit

As a formula: (Wing width − net debit) × lot size, anywhere between the two short strikes. Here (300 − 63) × 75 = 237 × 75 = ₹17,775, if the underlying settles between 23,900 and 24,100. The wing width is the 300-point gap from an outer long to the nearer short.
Computed from the illustrative legs: ₹237 per unit, i.e. ₹17,775 for one NIFTY lot.

Margin requirement

Because both short body calls are hedged by long wings, the exchange grants full spread benefit and the position is margined close to the net debit paid. Like the long butterfly, it is a light structure to carry, with no naked short exposure to spike the requirement. SPAN plus exposure applies and NSE and brokers revise the formulas periodically.

Greeks exposure

Δnegative

Delta is close to neutral with price on the plateau because the position is balanced across the body; it tilts positive below 23,900 and negative above 24,100 as the short body calls dominate.

Γnegative

Gamma is close to neutral across the plateau, where the short body and long wings nearly offset, and turns negative as price moves toward an outer strike near expiry.

Θpositive

Theta is positive when price sits on the plateau: as a net seller of the body, the position gains value as time passes and the structure firms toward its maximum.

Vnegative

Vega is negative on the plateau because the two short body options outweigh the wings, so falling implied volatility lifts the position toward its maximum.

ρnegative

Rho is negligible for this monthly index condor; interest rates are not a meaningful driver.

The sign on each Greek above is computed, not asserted: it is the net exposure of the illustrative legs at spot 24,000 with 30 days to expiry, priced with Black–Scholes using each leg's implied volatility calibrated from its own quoted premium. A sign can flip as the underlying moves — the panels below show where. See Methodology.

Net Greeks across underlying prices

Each panel shows the whole position's net Greek, not one leg's. The dashed vertical is the reference spot.

Volatility impact

On the plateau the long condor is short volatility, being net short its two body options, so falling implied volatility lifts it toward its maximum while rising volatility flattens it toward the debit. That is why it is generally opened when volatility is elevated and expected to ease. The wider body means the short-volatility exposure is spread across a range of prices rather than concentrated at one strike, so the position's vega changes more gently as price moves within the plateau than a butterfly's does around its peak. Beyond the outer strikes the sensitivity fades as the options approach their intrinsic values.

Sensitivity to implied volatility

Position P&L with the underlying pinned at spot and 30 days to expiry, as implied volatility alone moves. This isolates vega from delta.

Time decay

Time decay works for the long condor when price sits on or near the plateau, because it is net short the two body calls whose time value erodes in its favour, and the structure firms toward its maximum as expiry nears. If price is out near or beyond a breakeven, time decay works against the position, bleeding it toward the debit. The wide body means the favourable decay is available across a range of settlement prices rather than only at a single strike, making the condor more forgiving than a butterfly about exactly where price rests.

Value of the position as expiry approaches

Underlying held still at spot; only time passes. An upward slope means time is working for the position, a downward slope means against it.

Practical examples

NIFTY example

Using the 30-day chain: buy the 23,600 call at ₹711, sell the 23,900 call at ₹500, sell the 24,100 call at ₹379, and buy the 24,400 call at ₹231. Net debit = (711 + 231) − (500 + 379) = 942 − 879 = ₹63 per unit, or 63 × 75 = ₹4,725 for one lot — the maximum loss. Each wing is 300 points wide (from an outer long to the nearer short), so the maximum profit is (300 − 63) × 75 = 237 × 75 = ₹17,775, earned anywhere between 23,900 and 24,100. Breakevens are 23,663 and 24,337. A settlement at 24,000 pays the full ₹17,775; below 23,600 or above 24,400 the loss is ₹4,725; at 24,337 it breaks even before costs. Figures exclude brokerage, STT and other charges.

BANKNIFTY example

Illustrative BANKNIFTY premiums, spot near 52,000, lot 30: buy the 51,000 call at ₹880, sell the 51,600 call at ₹520, sell the 52,400 call at ₹180, and buy the 53,000 call at ₹90. Net debit = (880 + 90) − (520 + 180) = 970 − 700 = ₹270 per unit, or 270 × 30 = ₹8,100 for one lot — the maximum loss. Each wing is 600 points wide, so the maximum profit is (600 − 270) × 30 = 330 × 30 = ₹9,900, earned anywhere between 51,600 and 52,400. Breakevens are 51,270 and 52,730. A settlement at 52,000 pays ₹9,900; below 51,000 or above 53,000 the loss is ₹8,100. Premiums are illustrative and lot sizes are those at the time of writing; figures exclude transaction costs.

Lot sizes used above (NIFTY 75, BANKNIFTY 30) are those in force at the time of writing; NSE revises them periodically. Figures exclude brokerage, STT, exchange charges, stamp duty and GST, all of which materially affect small spreads.

Common mistakes

Confusing a long condor with an iron condor — the all-call version is a debit and uses a deep in-the-money leg, while the iron version is a credit built from liquid out-of-the-money options.
Paying up for the deep in-the-money 23,600 call, whose wide bid-ask spread can add materially to the cost of an all-call condor compared with the iron equivalent.
Expecting the full ₹17,775 regardless of price — it is earned only on the plateau between the inner strikes, and outside it the position pays less or loses the debit.
Opening it when implied volatility is low and likely to rise, which flattens the plateau and works against a position that wants volatility to fall.
Underestimating that four legs mean eight fills, and that on a 63-point debit the cumulative spreads and charges are proportionally heavy.
Placing the plateau away from the current price and treating the low debit as cheap, when it reflects the low chance of price reaching that range.

Advantages & disadvantages

Advantages

The flat top means the maximum profit is earned across a range between the inner strikes, not just at a single point, so it is more forgiving than a butterfly.
The maximum loss is limited to a small net debit, known before entry and capped by the two outer long calls.
Margin is light, close to the debit paid, because both short body calls are hedged by long wings.
Both tails are capped, so there is no undefined risk however far the underlying moves in either direction.
On cash-settled index options there is no assignment risk, so the four-strike structure settles cleanly at the exchange settlement price.

Disadvantages

The maximum profit is lower than a butterfly's on the same wings, the price of the wider plateau.
Built from calls, it requires a deep in-the-money leg whose bid-ask spread is wider and less liquid than the out-of-the-money legs of an iron condor.
Four legs and eight fills make transaction costs proportionally heavy on a small debit.
A rise in implied volatility flattens the plateau and marks the position down, working against it when the market grows unsettled.
It still needs price to stay within the range into expiry, so a decisive move beyond an outer strike leaves only the small debit loss.

Professional usage

Desks treat long and iron condors as interchangeable expressions of a range view and choose between them on execution grounds — liquidity, financing and margin efficiency — rather than economics, since put-call parity makes them equivalent. A market maker will quote whichever version a client can fill more cheaply and hedge the residual delta with futures. Institutions warehouse many condors across strikes and expiries so the aggregate short-gamma, short-vega exposure is managed at the book level. Retail traders can build either version but usually find the iron condor's out-of-the-money legs cheaper to trade than an all-call condor's in-the-money leg.

Key takeaway

A long condor is a butterfly with a flat top and an iron condor in disguise: same range view, same capped risk, but built from calls for a debit — which is exactly why traders usually prefer the more liquid iron version instead.

Frequently asked questions

What is a long condor?

A long condor is a four-strike, defined-risk neutral strategy built from calls: buy one low, sell two at two middle strikes, buy one high. Bought for a debit, it pays a flat maximum across a range between the inner strikes, with the loss capped at the debit.

What is the maximum profit on a long condor?

The maximum profit is the wing width minus the debit, times the lot size, earned anywhere between the two short strikes. On the illustrative NIFTY chain the wing is 300 points, so that is (300 − 63) × 75 = ₹17,775, between 23,900 and 24,100.

What is the maximum loss on a long condor?

The maximum loss is the net debit paid, times the lot size. Here 63 × 75 = ₹4,725, reached anywhere outside the profit band on either side. It is capped by the two outer long calls and known before entry.

Is a long condor the same as an iron condor?

Economically almost identical, but constructed differently. A long condor uses four call strikes for a debit and includes a deep in-the-money leg; an iron condor mixes puts and calls for a credit using out-of-the-money legs. Up to put-call parity they are equivalent.

Why choose an iron condor over a long condor?

Because the iron condor is built from out-of-the-money options, which are more liquid and avoid the deep in-the-money leg an all-call long condor requires. The economics are the same on one chain, so the choice usually comes down to execution and liquidity.

Where are the breakevens on a long condor?

The lower breakeven is the lowest strike plus the debit, and the upper is the highest strike minus the debit. On the illustrative chain that is 23,663 and 24,337. Between these the position is profitable at expiry.

How is a long condor different from a long butterfly?

A long butterfly has a single peak; a long condor splits the body across two strikes to create a flat plateau. The condor pays a lower maximum but across a wider range, making it more forgiving about exactly where price lands.

Does a long condor benefit from time decay?

Yes, when price sits on or near the plateau. As the net seller of the two body calls, the position gains as their time value erodes, firming toward its maximum near expiry. Outside the plateau, time decay works against it toward the debit.

How does volatility affect a long condor?

On the plateau it is short volatility, so falling implied volatility lifts it toward its maximum while rising volatility flattens it toward the debit. It is generally opened when volatility is elevated and expected to ease.

Is a long condor good for beginners?

Its risk is a small, capped debit, which is approachable, but the all-call construction with a deep in-the-money leg is fiddly to trade. Many beginners find the iron condor a more liquid way to express the same range view.

Can I lose more than I paid on a long condor?

No. The maximum loss is the net debit, and both tails are capped by the outer long calls, so no move in the underlying can produce a loss larger than the amount paid to open the position.

What happens to a long condor at expiry?

If the underlying settles between the inner strikes, the position pays its flat maximum. Away from that plateau it pays less, down to the debit lost beyond an outer strike. Index options settle in cash at the exchange settlement price.

How much margin does a long condor need?

Little — both short body calls are hedged by long wings, so the exchange grants full spread benefit and the position is margined close to the debit paid, with no naked short exposure. SPAN plus exposure applies.

Can a long condor be built with puts?

Yes — an all-put condor on the same four strikes has the same payoff and, by put-call parity, the same economics. Traders choose calls, puts or the iron mix based on which strikes are most liquid and cheapest to trade.

What is the ideal market for a long condor?

A range-bound market expected to stay within a band through expiry, with implied volatility elevated and likely to fall. It is unsuited to a trending or volatile market that carries price beyond an outer strike.

Does a long condor have assignment risk?

On cash-settled NIFTY and BANKNIFTY options, no — it settles in cash. On physically settled stock options, a short body call in the money can be assigned early, which can unbalance the structure and leave a stock position overnight.

Why is the maximum profit lower than a butterfly's?

Because splitting the body across two strikes to create the plateau costs some of the peak value. The condor trades a lower maximum for a wider range in which that maximum is earned — a gentler, more forgiving payoff than the butterfly's sharp point.

How wide should the plateau be?

A wider gap between the inner strikes gives a broader plateau but a lower maximum profit; a narrower gap approaches a butterfly with a higher, sharper maximum. The choice balances how forgiving you want the position against how much you want it to pay.

How does a long condor sit relative to the current price?

It is usually centred so the current price falls within or near the plateau, giving the widest chance of finishing in the maximum-profit range. Placing the plateau away from spot lowers the cost but also the probability of reaching it.

What costs affect a long condor?

Brokerage, STT, exchange charges, stamp duty and GST apply to eight fills over the trade's life, and the deep in-the-money call carries a wider bid-ask spread. On a 63-point debit these costs are proportionally significant.

Voice search & related questions

Natural-language questions people ask about the Long Condor.

What is a long condor?

A long condor buys a call low, sells two at two middle strikes and buys one high, for a small debit. It pays its most across a range between the middle strikes — a flat top rather than a peak — and loses only the debit if price runs far outside.

Is a long condor the same as an iron condor?

Almost. They have the same payoff shape and, up to put-call parity, the same economics. The difference is a long condor uses four calls for a debit, while an iron condor mixes puts and calls for a credit using more liquid out-of-the-money options.

Which option strategy has limited risk?

Many do — the property is defined risk, where long options cap the loss. A long condor is one: its outer calls limit the loss to the small debit. Iron condors, butterflies and verticals share it. There is no single answer, only the shared property.

How much can I lose on a long condor?

At most the net debit you paid, times the lot size — about ₹4,725 for one NIFTY lot on the illustrative chain. Both tails are capped by the outer long calls, so no move in the market can lose you more than that.

Why do traders prefer an iron condor to a long condor?

Because the iron condor is built from out-of-the-money options that are more liquid and easier to fill, while an all-call long condor needs a deep in-the-money leg with a wider spread. The economics match; the iron version just trades better.

Sources & references

Last reviewed 9 July 2026. Educational content only — not investment advice.