What Is a Bull Condor (With Calls)?

A Bull Condor Spread is an extension of the Butterfly strategy, built using 4 Call options at different strike prices but the same expiry.

• Market View: Expect low volatility with a mild bullish bias (price likely to stay between the two middle strikes).
• Volatility View: Works best in low implied volatility (IV) conditions.
• Risk/Reward: Both are limited.

🔹 How It Works

You combine 1 ITM Call, 2 OTM Calls, and 1 far OTM Call to form a “condor-shaped” payoff:

1. Buy 1 ITM Call (lower strike).
2. Sell 1 lower OTM Call.
3. Sell 1 higher OTM Call.
4. Buy 1 far OTM Call.

🔹 Example

• Underlying: Nifty @ 20,000

Positions:

• Buy 19,600 Call = ₹500
• Sell 19,800 Call = ₹300
• Sell 20,200 Call = ₹120
• Buy 20,400 Call = ₹50

Net Debit = 500 + 50 – (300 + 120) = ₹130

🔹 Payoff Analysis

• Max Profit = Difference between inner strikes – Net Debit
  = (400 – 130) = ₹270 per lot.
• Max Loss = Net Debit
  = ₹130 per lot.
• Breakevens = 19,730 and 20,270

🔹 How Profit Is Achieved

1. If Nifty ends between 19,800 & 20,200
   • Both sold Calls expire worthless.
   • Payoff = Intrinsic value of ITM spread – Net Debit = ₹270 profit.
2. If Nifty < 19,600 or > 20,400
   • All spreads offset.
   • Max Loss = ₹130.

Notes

• A Bull Condor is a limited-risk, limited-reward strategy.
• Max profit occurs when the underlying closes between the two short strikes.
• Safer than a Butterfly as the profit zone is wider, though peak profit is lower.