Short Call Condor is a strategy that must be devised when the investor is neutral on the market direction and expects markets to break out of a trading range, but is not sure in which direction.
A Short Call Condor strategy is formed by selling an “Out-of-the-Money” Call Option (lower strike), selling “In-the-Money” Call Option (lower strike), buying “Out-of-the-Money” Call Option (higher middle) and buying “In-the -Money” Call Option (higher middle). All Call Options must have the same underlying security and expiration month.
This strategy is suitable in a volatile market. The maximum profit occurs if the underlying finishes on the either side of the Upper or Lower Strike prices at expiry.
Investor view: Neutral on direction, but expecting breakout in either direction.
Risk: Limited.
Reward: Limited.
Lower breakeven: Lowest Strike + net premium received
Higher breakeven: Highest Strike – net premium received.


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