Outlook: Range-bound. Taught in full in Lesson 24, Iron condors & butterflies: income from calm. This page is the reference card.
Illustration, not a recommendation. The strikes and premiums on this page are fixed teaching figures, not live quotes, and no strategy suits every account or every market. Read the full disclaimer.
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What you must believe
NIFTY stays between the walls through expiry: no trend, no shock, no event inside the window. You are running a small insurance company against movement.
Construction
Sell the 24,800 PE (₹90) and 25,200 CE (₹55) at the canon OI walls; buy the 24,600 PE (₹40) and 25,400 CE (₹25) as wings. Net credit ₹80 per unit: ₹5,200 per lot.
The numbers, before entry
Max profit: ₹5,200, anywhere between 24,800 and 25,200
Max loss: ₹7,800, beyond either wing
Breakevens: 24,720 and 25,280: a 560-point profit zone
Margin: near the capped loss, a fraction of the naked strangle's ₹2 lakh
Greeks profile
Delta-neutral at entry, short gamma, long theta, short vega: the strangle's engine with a seatbelt bolted on.
Realistic expectations
Collecting ₹5,200 against ₹7,800 needs a 60% win rate to break even; walls-and-delta placement suggests 70 to 75%. The edge is real, thin, and fully consumable by bad discipline. Full losses are scheduled costs of the business, not surprises.
Management rules
Take 50 to 60% of max profit and redeploy
Act when a short strike is threatened: close, roll the untested side, or roll out, chosen before entry
Size so a full ₹7,800 loss is boring; it will happen on schedule
With other strategies
It is literally two credit spreads: manage the sides independently, rolling the untested spread inward for extra credit when one side is threatened
The iron butterfly is the same trade betting on a pin: swap to it when the evidence says "parked", not just "ranged"
The calendar is its opposite-vega twin: condors at high IV rank, calendars at low, one range toolkit for all weathers
The GEXflip level (Lesson 27) is its regime alarm: a close beyond it means the hedging physics that defended your walls has switched sides; short-premium exits fire there
Common mistakes
Selling every week regardless of IV rank; no-trade weeks are a position
Pulling strikes inside the expected move for fatter credit
Adjusting repeatedly into triple the original risk to defend the first ₹5,200