1const t=`<div class="strategy-article"> 2 <div class="strategy-highlights"> 3 <h3 class="strategy-highlights__heading">Strategy Highlights</h3> 4 <ul class="strategy-highlights__items"> 5 <li class="strategy-highlights__item"> 6 <div class="strategy-highlights__item-heading"> 7 <div class="strategy-highlights__item-icon-wrapper"> 8 <img 9 class="strategy-highlights__item-icon" 10 src="https://www.optionseducation.org/img/content-images/strategy-icons/motivation.svg" 11 alt="Motivation" 12 /> 13 </div> 14 <div class="strategy-highlights__item-title">Motivation</div> 15 </div> 16 <div class="strategy-highlights__item-description"> 17 Anticipating minimal price movement in the underlying during the lifetime of the options. 18 </div> 19 </li> 20 <li class="strategy-highlights__item"> 21 <div class="strategy-highlights__item-heading"> 22 <div class="strategy-highlights__item-icon-wrapper"> 23 <img 24 class="strategy-highlights__item-icon" 25 src="https://www.optionseducation.org/img/content-images/strategy-icons/neutral-outlook.svg" 26 alt="Neutral Outlook" 27 /> 28 </div> 29 <div class="strategy-highlights__item-title">Neutral Outlook</div> 30 </div> 31 <div class="strategy-highlights__item-description"> 32 The long put condor investor is normally looking for little or no movement in the underlying. 33 </div> 34 </li> 35 <li class="strategy-highlights__item"> 36 <div class="strategy-highlights__item-heading"> 37 <div class="strategy-highlights__item-icon-wrapper"> 38 <img 39 class="strategy-highlights__item-icon" 40 src="https://www.optionseducation.org/img/content-images/strategy-icons/max-gain.svg" 41 alt="Maximum Gain" 42 /> 43 </div> 44 <div class="strategy-highlights__item-title">Maximum Gain</div> 45 </div> 46 <div class="strategy-highlights__item-description"> 47 The maximum gain would occur if the underlying security is between the two short put strikes at expiration. 48 </div> 49 </li> 50 <li class="strategy-highlights__item"> 51 <div class="strategy-highlights__item-heading"> 52 <div class="strategy-highlights__item-icon-wrapper"> 53 <img 54 class="strategy-highlights__item-icon" 55 src="https://www.optionseducation.org/img/content-images/strategy-icons/max-loss.svg" 56 alt="Maximum Loss" 57 /> 58 </div> 59 <div class="strategy-highlights__item-title">Maximum Loss</div> 60 </div> 61 <div class="strategy-highlights__item-description"> 62 In all circumstances the maximum loss is limited to the net debit paid (assuming the distances between all 63 four strikes prices are equal). 64 </div> 65 </li> 66 <li class="strategy-highlights__item"> 67 <div class="strategy-highlights__item-heading"> 68 <div class="strategy-highlights__item-icon-wrapper"> 69 <img 70 class="strategy-highlights__item-icon" 71 src="https://www.optionseducation.org/img/content-images/strategy-icons/time-decay.svg" 72 alt="Time Decay" 73 /> 74 </div> 75 <div class="strategy-highlights__item-title">Time Decay</div> 76 </div> 77 <div class="strategy-highlights__item-description"> 78 All other things being equal, the passage of time will have a positive effect on this strategy. 79 </div> 80 </li> 81 <li class="strategy-highlights__item"> 82 <div class="strategy-highlights__item-heading"> 83 <div class="strategy-highlights__item-icon-wrapper"> 84 <img 85 class="strategy-highlights__item-icon" 86 src="https://www.optionseducation.org/img/content-images/strategy-icons/volatility.svg" 87 alt="Volatility Impact" 88 /> 89 </div> 90 <div class="strategy-highlights__item-title">Volatility Impact</div> 91 </div> 92 <div class="strategy-highlights__item-description"> 93 All other things being equal, an increase in implied volatility if the underlying is between the two short
94 strikes when established would have a negative impact on this strategy. 95 </div> 96 </li> 97 </ul> 98 </div> 99 <div class="description"> 100 <h1>Long Put Condor</h1> 101 <h3>This strategy profits if the underlying security is between the two short put strikes at expiration.</h3> 102 <h3 id="h3-item-2">Description</h3> 103 <p> 104 A long put condor consists of four different put options of the same expiration. The strategy is constructed of 1 105 long out-of-money put at the lowest strike, 1 short out-of-money put at the middle strike, 1 short put at a higher 106 in-the-money strike and 1 long deeper in-the-money put at the highest strike. 107 </p> 108 109 <p> 110 An alternative way to think about this strategy is as an out-of-the-money 111 <b>bull put spread</b> (credit spread) coupled with an in-the-money <b>bear put spread</b> (debit spread) with the 112 bear put spread at the higher strikes and the bull put spread is at the lower strikes. 113 </p> 114 115 <h3 id="h3-item-3">Outlook</h3> 116 117 <p>The long put condor investor is normally looking for little or no movement in the underlying.</p> 118 119 <h3 id="h3-item-4">Summary</h3> 120 121 <p>This strategy profits if the underlying security is between the two short put strikes at expiration.</p> 122 123 <div class="strategybg"> 124 <div class="strategyimg image"> 125 <figure class="figure--right"> 126 <img 127 alt="long-put-condor.jpeg" 128 src="https://www.optionseducation.org/getmedia/caeb7a2b-9ef1-439f-b41b-86e62e20a8c2/long-put-condor.jpeg" 129 title="long-put-condor.jpeg" 130 /> 131 <figcaption>Net Position (at expiration)</figcaption> 132 </figure> 133 </div> 134 </div> 135 136 <h3 id="h3-item-5">Example</h3> 137 138 <div class="strategybg"> 139 <ul> 140 <li class="strategylinktwo">Long 1 XYZ 55 Put</li> 141 <li class="strategylinktwo">Short 1 XYZ 60 Put</li> 142 <li class="strategylinktwo">Short 1 XYZ 65 Put</li> 143 <li class="strategylink">Long 1 XYZ 70 Put</li> 144 </ul> 145 146 <p class="strategymax"><strong>MAXIMUM GAIN</strong></p> 147 148 <ul> 149 <li class="strategymaxtext">(Highest long put strike â highest short put strike) - Net premium paid</li> 150 </ul> 151 152 <p class="strategymax"><strong>MAXIMUM LOSS</strong></p> 153 154 <ul> 155 <li class="strategymaxtext">Net premium paid</li> 156 </ul> 157 </div> 158 159 <h3 id="h3-item-6">Motivation</h3> 160 161 <p>Anticipating minimal price movement in the underlying during the lifetime of the options.</p> 162 163 <h3 id="h3-item-7">Variations</h3> 164 165 <p> 166 This strategy is a variation of the 167 <b>long put butterfly</b>. 168 </p> 169 170 <p> 171 Instead of a body and two wings, the body has been split into two different (short put) strikes so that there are 172 two shoulders in the middle and two wingtips outside the shoulders. 173 </p> 174 175 <h3 id="h3-item-8">Max Loss</h3> 176 177 <p> 178 In all circumstances the maximum loss is limited to the net debit paid (assuming the distances between all four 179 strikes prices are equal). The maximum loss would occur should the underlying be above the highest long put strike 180 at expiration or at or below the lowest long put strike. At the highest strike all the options would expire 181 worthless, and the debit paid to initiate the position would be lost. At expiration, all the options below the 182 lowest strike would be in-the-money and the resulting profits and losses would offset. 183 </p> 184 185 <h3 id="h3-item-9">Max Gain</h3> 186 187 <p> 188 The maximum gain would occur if the underlying security is between the two short put strikes at expiration. In 189 that case, the higher strike long put is worth its maximum value. The profit would be the difference between the 190 strikes less the premium paid to initiate the position. 191 </p> 192 193 <h3 id="h3-item-10">Profit/Loss</h3> 194 195 <p> 196 The potential profit and loss are both limited. In essence, a long put condor at expiration has a minimum value of 197 zero and a maximum value equal to the distance between the strike prices. An investor who buys a long put condor 198 pays a premium somewhere between the minimum and maximum value, and profits if the condor's value moves toward the 199 maximum payoff as expiration approaches. 200 </p> 201 202 <h3 id="h3-item-11">Breakeven</h3> 203 204 <p> 205 There are two breakeven points. This strategy breaks even if at expiration the underlying security is below the
206 highest long put strike less the amount of premium paid to initiate the position or if the underlying is above the 207 lowest long put strike plus the premium paid. 208 </p> 209 210 <p>Downside breakeven = lower long put strike + premium paid</p> 211 212 <p>Upside breakeven = higher long put strike - premium paid</p> 213 214 <h3 id="h3-item-12">Volatility</h3> 215 216 <p> 217 All other things being equal, an increase in implied volatility if the underlying is between the two short strikes 218 when established would have a negative impact on this strategy. As with most strategies however, the impact of 219 implied volatility changes will depend on strike selection relative to the stock price when the position is 220 established. 221 </p> 222 223 <h3 id="h3-item-13">Time Decay</h3> 224 225 <p>All other things being equal, the passage of time will have a positive effect on this strategy.</p> 226 227 <h3 id="h3-item-14">Assignment Risk</h3> 228 229 <p> 230 In the case of American style options, the short options that form the body of the long put condor are subject to 231 assignment at any time. Should early assignment occur on the short put options, the investor can exercise the 232 appropriate long option but may be required to borrow or finance stock for one business day. The resulting 233 position from an assignment on both short puts may still result in a net long underlying position. Investors can 234 avoid an assignment by closing out their position if the short puts appear to be candidates for an early exercise. 235 </p> 236 237 <p> 238 Be aware of situations where the underlying is involved in a restructuring or capitalization event, such as a 239 merger, takeover, spin-off or special dividend, as that could completely upset typical expectations regarding 240 early exercise of options on the security. 241 </p> 242 243 <h3 id="h3-item-15">Expiration Risk</h3> 244 245 <p> 246 Investors face an uncertainty when the underlying trades below both short put strikes but above the lowest long 247 put strike. In this case, the investor is likely to be assigned on both short puts resulting in a long position 248 that is unhedged following expiration. Investors in this case would be subject to an adverse move the next 249 business day. 250 </p> 251 252 <h3 id="h3-item-16">Comments</h3> 253 254 <p> 255 One important consideration of the long put condor is assignment risk. If the underlying is below both short put 256 strikes yet below the highest long put strike, an assignment would result in both short puts purchasing the 257 underlying with only one of the long puts being exercised. Thus, the investor would end up net long the 258 underlying. 259 </p> 260 261 <p> 262 Another consideration for the long put condor is commission charges. As there are four different contracts traded, 263 that may entail four separate commission charges to establish the position and four additional commission charges 264 if the trade is closed prior to expiration. Investors should understand their commission costs before entering 265 into this transaction. 266 </p> 267 268 <h3 id="h3-item-17">Related Position</h3> 269 270 <p>Comparable Position: <b>Short Condor (Iron Condor)</b></p> 271 </div> 272</div> 273`;export{t as default};
Line numbers count LF bytes from the start of the resource, as the search results do. Vendor segments are library code the classifier recognised; they are stored but not indexed. Bytes are shown as Latin1 characters, one per byte.