Short Iron Condor

This volatility strategy is a combination of a bear put spread and a bull call spread and consists of a short position in an OTM put option with a strike price K1 , a long position in an OTM put option with a higher strike price K2 , a long position in an OTM call option with a strike price K3 , and a short position in an OTM call option with a higher strike price K4 . The strikes are equidistant: K4 − K3 = K3 − K2 = K2 − K1 = κ . This is a net debit trade. The trader’s outlook is neutral. This is a capital gain strategy.