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Long Call Condor

A Long Call Condor involves buying one call option at a lower strike, selling two call options at middle strikes, and buying one call option at a higher strike. It profits when the price stays within a defined range near the middle strikes.

  • Ideal for low-volatility conditions, where the price is expected to remain stable.
  • Strike prices are equidistant (lower, middle, and higher strikes evenly spaced).
  • Risk is limited to the net premium paid, while profit is capped at the difference between the adjacent strikes minus the premium paid.
  • Provides a safe strategy for range-bound price action.

Example:

  • NIFTY trading at 18,000.
  • Buy 17,900 Call at ₹200, sell 2 × 18,000 Calls at ₹150 each, and buy 18,100 Call at ₹100 (lot size = 50).
  • Outcome:
    1. If NIFTY stays at 18,000 at expiry:
      • Both middle strike calls expire worthless.
      • Gain on lower and higher strikes = ₹10,000 (maximum profit).
    2. If NIFTY rises to 18,100 at expiry:
      • Loss from the middle strike calls = ₹5,000.
      • Net profit = ₹0.
    3. If NIFTY moves beyond 17,900 or 18,100 at expiry:
      • All options expire worthless.
      • Net loss = ₹5,000 (premium paid).
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