Condor(redirected from Condor (disambiguation))
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Applies to derivative products. Option strategy consisting of both puts and calls at different strike prices to capitalize on a narrow range of volatility. The payoff diagram takes the shape of a bird.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
In options, a strategy in which four contracts are bought or sold at four different strike prices. In a call condor, the investor buys the calls with the highest and lowest strike prices and sells the calls with the middle strike prices. In a put condor, the investor sells the contracts with the highest and lowest strikes and buys the middle ones. An investor engages in a condor strategy if he/she expects a great deal of volatility on the underlying asset; it allows him/her to make a profit regardless of the price of the underlying as long as it remains in a certain (broad) range. See also: Butterfly spread.
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