What is the difference between a condor and an iron condor?

Both the condor and the iron condor are extensions of the butterfly spread and iron butterfly, respectively. An iron condor is a delta-neutral options strategy that profits the most when the underlying asset does not move much, although the strategy can be modified with a bullish or bearish bias.

How do you sell a short iron condor?

To SELL or "go short" an iron condor, the trader will SELL options contracts for the inner strikes using an out-of-the-money put and out-of-the-money call options. The trader will then also BUY the options contracts for the outer strikes. A short iron condor comprises two credit spreads, a bull put spread and a bear call spread.

How does volatility affect the value of an iron condor?

As volatility increases or decreases, the value of iron condor changes — sometimes significantly. An iron condor is a strategy designed to have a substantial probability of earning a little profit when the underlying security is perceived to have low volatility.

What is the reverse side of a condor?

The reverse side of condors is the iron condor, which by default consists of both calls and puts. Hence, in the future when you hear some trader mentioning an iron condor trade, there is no need for clarification as to which option class the trader used — both were utilized.