Question about iron condor

A

arman555

Hello Traders,

I am very new to options. Can someone please help me understand how can Iron condor loose money?

Like Sell Call and Put ATM
BUY OTM Call and put

Such that premium from selling exactly or (approximately) equals to the distance and the primium paid either side.

Example if i get 600$ premium from selling. Lets say fx options of 1 standard lot of Eurusd. I have 60 pips window on either side before it goes into loss. Now, lets say the buying put costs 100$ 50 pips OTM. It would mean even if the markets runs out of that window (downward) in our example the total loss would be 50 pips from sold put (500$) + 100$ for Buy call. Thats = 600 we got in the beginning.

If in case the price stays in the middle you make money else 0. I am sure i am missing something, but i cant think of it yet
 
One, that's not an iron condor - that's an iron fly. Two, look at the actual prices on the option chain rather than making them up, and you'll see where your mistake is.
 
As BWS said, use a real price example.

Example below: TSLA
Sell 245C & 245P .... 42.10
Buy 265C & 225P .... 25.30
Net credit ..... 16.80
Spreads are 20 wide so loss can be 3.20.

tsla.jpg
 
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