Jared Woodard of CondorOptions outlines the rules that he and his team follow for successful iron condor trading.

These are the rules we use when trading iron condors and any similar options spreads. Note that these are time-tested “rules of thumb;” they aren’t iron-clad commandments that can never be broken, but they are strategic pointers that have proven useful. If you ever see us breaking one of these rules, don’t hesitate to ask why—there’s probably a good reason!


  • Always enter a position at least 4-10 weeks prior to expiration. If you’re wrong, the negative gamma risk outweighs positive theta risk at less than four weeks out.

  • Look for a probability of success around 50-70%. Trades with higher probabilities of success also require higher levels of risk, so we usually avoid them.

  • Never enter or exit a position the Wednesday, Thursday, or Friday of expiration week, if possible. Market makers and even electronic servers are taught to tighten the bid/ask spreads during these times.

  • Range-finding techniques: we use a “Condor Options”-branded secret sauce to determine the range of the spreads we work with. But we’ll give you a hint: the formula includes ingredients such as standard deviations, historical volatility, implied volatility, and the price of tea in China.


  • Exit 4-10 calendar days (not trading days) before expiration, and not before then. In other words, exit by time function, not by price. If you or we get really nervous about a trade, there’s no harm in exiting half the position at 10 days before expiration and the rest at 4 days out.

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