A condor is comprised of four consecutive strikes of the same type of option (either all calls or all puts) where the trader is short the two inside strikes and long the two outside strikes.
A long condor is done for a debit and achieves max value at expiration with price finishing between or at the inside strikes. A condor has zero value at expiration when price finishes outside either of the outside strikes.
This trade is similar to the butterfly in that it involves the trader being short two inside contracts while being long one contract above and long one contract below. The condor will generally have a slightly lower profit potential than a butterfly but a wider “body” where price can achieve max profit at expiration (since it is comprised of two different short strikes).
It differs from the iron condor in that the condor uses consecutive strikes, whereas the iron condor tends to skip at least one strike between the short strikes.
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