Reverse iron condor calculator pay for the move, cap the cost
A reverse iron condor is an iron condor with every leg flipped. You buy the inner strikes and sell the outer ones, paying a debit instead of collecting a credit, and you profit when the underlying moves far enough in either direction. It is a long strangle with the tails sold off to make it cheaper — and capped, for the same reason.
Outlook: Volatile — a big move, direction unknown
Max profit
—
best case at expiry
Max loss
—
worst case at expiry
Breakeven
—
where the trade turns even
Net debit / credit
—
to open the position
Your reverse iron condor
Per-share premiums. One contract = 100 shares.
100 shares per contract
Profit at expiryLoss at expiryBreakevenStrikes & spot
How a reverse iron condor pays
Net debit = (long put + long call) − (short put + short call)
Max profit = (wing width − net debit) × 100 × contracts (at or beyond either short strike)
Max loss = net debit × 100 × contracts (anywhere between the long strikes)
Lower breakeven = long put strike − net debit
Upper breakeven = long call strike + net debit
The loss is the debit, and nothing more. Every outcome between your two long strikes costs exactly what you paid — there is no cliff beyond it.
The gain is capped by the strikes you sold. Selling the tails is what makes it cheaper than a strangle, and it is also what stops the payoff growing past them.
Standing still is the losing case. Unlike an iron condor, quiet is what costs you. Time decay works against this position every day it does not move.
Worth naming. This is the trade an iron condor seller is on the other side of, and the same statistics apply in reverse: most of the time the underlying does not move far enough, and most of the time this loses. It needs a reason — an earnings date, a catalyst, an implied volatility you believe is too low — not merely a chart that looks quiet.
What this does not model
Every figure here is the payoff at expiry. Before then your position is marked at market prices that still carry time value, so a trade can show a loss while sitting exactly where you wanted it — falling implied volatility alone will do that.
Short legs carry assignment risk. American-style options can be exercised at any time, most commonly on in-the-money calls just before an ex-dividend date. The diagram assumes you hold every leg to expiry.
For the live version — real Greeks, current marks and what-if scenarios against actual
chain data — that is what the GreeksView desk does, in your
browser, on your own broker keys.
Frequently asked questions
What is the difference between an iron condor and a reverse iron condor?
The direction of every leg. An iron condor sells the inner strikes and buys the outer ones for a credit, and wins when the underlying stays put. A reverse iron condor buys the inner strikes and sells the outer ones for a debit, and wins when it moves. Same four contracts, opposite bet.
What is the maximum loss on a reverse iron condor?
The net debit you paid, and you suffer it anywhere between your two long strikes — which includes the underlying not moving at all. In the example above that is $3.00, or $300 per contract.
How do I calculate max profit?
The width of one wing minus the net debit. Long the 95 put and short the 85 put is a $10 wing; pay $3.00 net and the most you can make is $7.00, or $700 per contract, reached at or beyond $85 on the downside and $115 on the upside.
Where are the breakevens?
The long put strike minus the debit, and the long call strike plus the debit. With longs at 95 and 105 and a $3.00 debit, the position needs to reach $92.00 or $108.00 just to break even — which is why the size of the expected move matters more than its direction.
Is a reverse iron condor better than a long strangle?
Cheaper, and capped. Selling the outer strikes reduces what you pay, so the breakevens sit closer in — but it also means the profit stops growing once the underlying passes them. A strangle costs more and keeps paying.
Are commissions included in these numbers?
No — every figure is gross. On multi-leg positions this matters more than people expect: four legs to open and four to close is eight commissions against what may be a couple of hundred dollars of credit. Check your broker's per-contract rate against the max profit shown here before deciding a trade is worth putting on.
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Educational tool only — not investment advice, and not a recommendation to enter any
position. Options involve substantial risk and are not suitable for every investor.
Figures are theoretical, exclude commissions and taxes, and assume the position is
held to expiry. GreeksView is not a broker and does not hold funds.