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Market Measures

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How Wide Should Iron Condors Be?

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

As you widen the wings of an iron condor, buying power increases exponentially while credit plateaus.

The inflection point (in SPY) where we want to trade is around the $20-wide long wings because that brings us closest to ⅓ the width of the iron condor.

For other underlyings in general, when the credit reaches ⅓ the width of the iron condor, that is a signal that credit is beginning to reach its maximum while risk keeps increasing.

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