Iron Condor not adding up.. help!

[stepseazy]

close I mean.

 

[stoic]

Quote from stepseazy:

no, its the opposite. your info paper is wrong. The long condor makes money in the middle and the short makes money if you have to cover.

No you are wrong.

The long Condor is a combonation of a Call debit spread and a Put Debit spread. If the stock remains at 50 all options expire worthless and you lose the net debit.

On the short condor, a combination of a credit Call spread and credit Put spread if all options expire wortless the you keep the credit.

See the screen shots from www.optioneducation.net

 

[stepseazy]

hmm, looks like TOS has it the same way as you for the iron condor graph but the regular condor is upside down if you go long. so that would make a long iron condor equivalent to a short condor. wikipedia has it the opposite so is prob wrong. Ok Stoic, I'll go with that.

 

[stepseazy]

IB has it the other way around. To buy the iron condor would be the opposite of what your graph says. WTF

 

[spindr0]

Quote from stepseazy:

hmm, looks like TOS has it the same way as you for the iron condor graph but the regular condor is upside down if you go long. so that would make a long iron condor equivalent to a short condor. wikipedia has it the opposite so is prob wrong. Ok Stoic, I'll go with that.

IB has it the other way around. To buy the iron condor would be the opposite of what your graph says. WTF

I don't know the official answer but out on the web you'll find it described both ways. Some say the net credit is a LONG IC. Others say that the net credit is a SHORT IC.

I think that it's counter intuitive to sell the body and call it a long position but that's just my 2 cents

 

[stepseazy]

reminds me of the da vinci code, the phalus vs the chaliss...

 

[stoic]

I have seen it both ways as well on the IC and the Iron Butterfly

I look at it this way:

Shorts result in credits...

Longs result in debits....

 

[jamesbp]

As ever with options the terminology can be confusing, and the simple way to remember the convention is, when referring to 'Long the wings' butterflies/condors is

- you are buying for a debit a 'long the wings' call/put fly/condor
- you are selling for a credit a 'long the wings' iron fly/condor

As the 'long the wings' iron fly/condor is really the 'sale' of a put spread and the sale of a call spread, it is relatively easy to remember that by selling both spreads you are 'selling' the long the wings Iron.

Hope that helps.
James

 

[spindr0]

Quote from jamesbp:

As ever with options the terminology can be confusing, and the simple way to remember the convention is, when referring to 'Long the wings' butterflies/condors is...

As the 'long the wings' iron fly/condor is really the 'sale' of a put spread and the sale of a call spread, it is relatively easy to remember that by selling both spreads you are 'selling' the long the wings Iron.

The problem is that out there in web world, some call that long, others call it short. So the only way to be on the same page is to describe the spread/strangle components.

 

[jamesbp]

Quote from spindr0:

The problem is that out there in web world, some call that long, others call it short. So the only way to be on the same page is to describe the spread/strangle components.

I thought that is what I said ... if you specify the wings as being 'long' or 'short' ... the spread is defined ...