Neutral4 legscreditneutral

A bull put and a bear call sold together — a credit collected for the stock staying inside a range, with both tails capped. Four legs, two of them protection.

An iron condor is two credit spreads with the same expiry — a bull put below the price and a bear call above it. You collect both credits and keep them if the stock finishes between the short strikes.

The two long wings cap both tails. Without them this is a short strangle, whose upside risk is unlimited.

Because both spreads cannot lose at the same time, the collateral is the wider single spread rather than the sum — a detail that only a payoff-based capital calculation gets right.

Priced off the guide's shared chain, on a $50 stock. Every figure beneath the diagram is computed from these legs by the same engine the Strategy Builder uses.

A plateau at maximum profit between the short strikes: both spreads expire worthless and both credits are kept.

Two slopes and two break-evens, one on each side, at the short strikes offset by the total credit.

Two flat tails at the maximum loss, one beyond each long wing.

The condition it suits is an expectation of range rather than direction, with implied volatility rich enough that the range being sold is wider than the stock is likely to travel.

It is the most volatility-dependent structure in the menu: the entire thesis is that implied movement exceeds realized movement. IV Rank against the stock's own history is the relevant reading, and the implied-versus-realized comparison is the one that actually decides it.

Four legs means four sets of transaction costs and four things to manage. The structure is more sensitive to execution quality than anything else here.

Like everything in this guide, these are descriptions of structures and conditions — context for your own decisions, not instructions to trade.