Iron Condor Max Loss Calculator
An iron condor is a bet that a stock will stay put: sell an out-of-the-money put spread and an out-of-the-money call spread, collect the premium, and profit if the price expires between your short strikes. The appeal is defined risk, but “defined” only helps if you actually compute the number before entering the trade.
The Iron Condor Max Loss Calculator below takes all four strikes plus your net credit and returns the complete risk picture: maximum loss, maximum profit, both breakeven points, and per-contract dollar figures. It handles unbalanced wings correctly, using the wider spread, which is where simpler calculators get the answer wrong.
Quick Answer
Anatomy of the four legs
Sell the 390 put (higher strike) and buy the 380 put (lower strike): a bull put spread that profits if the stock stays above 390.
Sell the 410 call (lower strike) and buy the 420 call (higher strike): a bear call spread that profits if the stock stays below 410.
Net credit $2.50/share. All four options expire worthless if the stock closes between 390 and 410, and you keep the full credit: maximum profit.
Max profit = net credit x 100 x contracts
Breakevens: short put strike - credit, and short call strike + credit
Worked example, checked against this exact tool
| Figure | Value | How |
|---|---|---|
| Put spread width | $10.00 | 390 - 380 |
| Call spread width | $10.00 | 420 - 410 |
| Max loss per share | $7.50 | $10.00 - $2.50 |
| Max loss per contract | $750.00 | $7.50 x 100 |
| Max profit per contract | $250.00 | $2.50 x 100 |
| Breakevens | $387.50 / $412.50 | 390 - 2.50; 410 + 2.50 |
Enter the pre-filled strikes and the calculator reproduces every figure. Note the risk/reward: you risk $750 to make $250, a 3-to-1 ratio that looks bad until you remember the probability. With the stock needing only to stay inside a $25-wide zone, these trades win roughly 60-70% of the time. Edge comes from frequency, not payoff.
Why the wider wing sets the risk
When the wings are unbalanced (say a $10 put spread and a $6 call spread), the maximum loss is set by the wider side: max loss = $10 - credit on the put side, $6 - credit on the call side. The calculator uses max(widths) automatically. This is the detail most max-loss-only tools fumble: they ask for a single "spread width" and silently assume symmetry. If your wings differ, their answer is wrong on one side. Try it above: widen the call wing to 425 and watch the max loss stay anchored to the $10 put wing until the call wing overtakes it.
The iron condor trade-off
Pros
- Defined, capped risk on both sides
- High win rate in range-bound markets
- Benefits from time decay (short theta)
- Benefits from falling volatility (short vega)
Cons
- Poor risk/reward ratio per trade (risk 3x profit is typical)
- Loses badly in trending or gapping markets
- Four-leg commissions eat small credits
- Early assignment risk on the short legs
What competing calculators miss
Symmetry assumed. The most common iron condor tools take one spread width and one credit. Real condors are often unbalanced, and the max loss follows the wider wing. Ours takes all four strikes.
Max loss without context. A loss number alone does not tell you whether the trade is worth taking. We show max profit and both breakevens alongside, because the decision is the ratio and the zone, not the loss in isolation.
No per-contract scaling. Several tools answer "per share" and leave the x100 and contract count to you, which is exactly the step where decimal errors happen. The main result here is total dollars at risk.
Strike validation missing. Enter strikes in the wrong order on most tools and you get a negative "max loss" with no warning. Ours validates the wing structure (long put below short put below short call below long call) and explains violations in plain language.
Key takeaways
- Max loss = (wider wing - credit) x 100 x contracts: $750 on the worked example.
- Unbalanced wings: the wider side sets the risk, always.
- Breakevens at 387.50/412.50 define the profitable zone; the stock must expire inside it.
- Subtract real commissions from the credit before judging any condor.
Frequently asked questions
Max loss = (width of the wider spread - net credit received) x 100 x number of contracts. The wider of the put and call spread sets the risk, because the loss occurs on whichever side the stock blows through.
The net credit received. If the stock expires between the two short strikes, all four options expire worthless and you keep the entire credit: $250 per contract in the worked example.
Short put strike minus the credit ($387.50) and short call strike plus the credit ($412.50). Between them the trade profits at expiration; outside them it loses, up to the max loss at the long strikes.
An iron butterfly uses the same strike for both short options (at the money), creating a narrower profit zone but a larger credit. An iron condor separates the short strikes, widening the profit zone at the cost of a smaller credit. The max-loss math is identical.
At expiration, no: the long options cap the loss. Before expiration, assignment risk, wide bid-ask spreads in a fast market, and gap moves can make exits worse than the theoretical max. The calculator assumes clean expiration mechanics.
Common practice: adjust or close when the stock approaches a short strike, or take profit around 50% of max profit rather than holding for the last dollars (which carry most of the gamma risk). Discipline here matters more than entry selection; see position-sizing via the Kelly formula.
Materially on small credits: four legs at $0.65/contract is $2.60 round-trip per condor, over 1% of a $250 max profit. Subtract commissions from the credit before computing max profit and breakevens.
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References
- Options Clearing Corporation, "Characteristics and Risks of Standardized Options" - required disclosure for options traders. OCC: Characteristics and Risks (PDF). Accessed October 19, 2026.
- Cboe Options Institute, "Iron Condor" strategy education - structure, payoff, and risk. Cboe Options Institute. Accessed October 19, 2026.
- Option Alpha, "Iron Condor Risk Calculation" - max loss on balanced and unbalanced wings. Option Alpha: Iron Condor Risk. Accessed October 19, 2026.
- FINRA, "Options" - investor education on multi-leg strategy risks. FINRA: Options. Accessed October 19, 2026.
- U.S. Securities and Exchange Commission, "Options" investor bulletin - risks of options strategies. SEC Investor Education. Accessed October 19, 2026.