Long Put Condor
Description
The Long Put Condor is another rangebound strategy and is the opposite of a Short
Put Condor, which is a volatility strategy. Long condors are quite popular because
they offer a good risk/reward ratio, together with low cost. The long options at the
outside strikes ensure that the risk is capped on both sides, and this is a much more
conservative strategy than the Short Strangle.
The Long Put Condor involves a low strike long put, a lower middle OTM Short
Put, a higher middle ITM Short Put, and a higher ITM Long Put. The resulting posi-
tion yields a position that is profitable in the event of the stock remaining range-
bound. Here the risk/reward ratio is attractive, and the profitable area of the risk
profile is wider than that of the Long Butterfly.
P/L Profile
|