The Short Condor Spread strategy is to profit from a stock moving up or down beyond the highest or the lowest strike price. The trader expects the price of the stock to be volatile i.e. massive price movement in any direction to take place.
The Short Condor Spread strategy is a direction neutral strategy with limited risk and a limited profit. The strategy involves buying OTM and ITM call options and selling ITM call option of a lower strike price and OTM call option of a higher strike price of the same underlying stock.
All options must have:
> Same Expiry Date
> Same underlying
> Legs must have the number of contracts in the ratio 1:1:1:1.