Short Call Condor

A Short Call Condor involves selling two call options at middle strikes and buying one call option each at lower and higher strikes. It profits from significant price movement outside the range of the middle strikes.

• Ideal for high-volatility conditions, where a large price move is expected.
• Strike prices are equidistant (lower, middle, and higher strikes evenly spaced).
• Risk is capped at the net premium paid, while profit occurs when the price moves significantly beyond the lower or higher strike.

Example:

• NIFTY trading at 18,000.
• Sell 17,900 Call at ₹200, buy 2 × 18,000 Calls at ₹150 each, and sell 18,100 Call at ₹100 (lot size = 50).
• Outcome:
  1. If NIFTY moves to 18,300 at expiry:
     • Gain on higher strike calls = ₹10,000.
     • Loss on lower strike calls = ₹0.
     • Net profit = ₹10,000.
  2. If NIFTY stays at 18,000 at expiry:
     • Loss from the middle strike calls = ₹10,000.
     • Net loss = ₹10,000.