LONG CALL CONDOR
Overview
Buy the lowest-strike call, sell the second, sell the third, and buy the highest-strike call — all same expiration. Profits when the stock finishes between the two middle strikes. Offers a wider profit zone than a butterfly at the cost of a slightly larger debit.
What it does
A long call condor is like a wider butterfly — you buy the two outer calls for protection and sell the two inner calls to generate income. The inner strikes are different (unlike a butterfly where both are the same), creating a flat 'plateau' of maximum profit between the two short strikes. The profit zone is wider but maximum gain per dollar invested is lower.
Structure
buy 1 call + sell 1 call + sell 1 call + buy 1 call
Setup
- 1.Buy 1 Call at the lowest strike.
- 2.Sell 1 Call at the second strike.
- 3.Sell 1 Call at the third strike.
- 4.Buy 1 Call at the highest strike. Equal spacing; same expiration.
Max profit
(Width Between Adjacent Strikes − Net Debit) × 100. E.g., ($10 − $0.50) × 100 = $950.
Max loss
Net Debit Paid. E.g., $0.50 × 100 = $50.
Breakeven
Lowest Strike + Net Debit (lower) and Highest Strike − Net Debit (upper). E.g., $180.50 and $199.50.
When to use
When you want a wider profit range than a butterfly for a stock you expect to stay range-bound.
When to avoid
In trending markets or ahead of major catalysts.
Example trade
Stock: SPY at $430 Buy 1 $420 Call / Sell 1 $430 Call / Sell 1 $440 Call / Buy 1 $450 Call Net Debit: ~$0.50 ($50) Expiration: 30 days Max Profit: ($10 - $0.50) × 100 = $950 (if SPY stays between $430-$440) Max Loss: $50 (if SPY is below $420 or above $450) Breakeven: ~$420.50 and ~$449.50
Common mistakes
- ×Paying too much debit for a condor — the low probability of hitting both inner strikes simultaneously must justify the cost.
- ×Entering long condors on expensive stocks where the wing cost absorbs most of the inner spread value.
- ×Not understanding that maximum profit occurs only between the two short strikes (the 'body').
- ×Confusing long condor (debit, wants range) with short condor/iron condor (credit, also wants range).
- ×Ignoring the commission cost on 4 legs for a very small debit trade.
FAQ
How is a long call condor different from a long butterfly?
A butterfly has both short calls at the same strike. A condor spreads those short strikes apart, creating a wider profit zone at the cost of higher debit and more contracts.
When is the best time to enter a long call condor?
When you have a precise range forecast and IV is high enough that the inner spread is worth more than the outer protection cost.