An iron condor is a defined risk option strategy. The position’s spread width, minus the credit received, defines the maximum loss.
For example, if you sell a balanced iron condor with $5 wide wings for a net credit of $1.64, the most you can lose on the position is $336 per contract, if the underlying price is above the long call option’s strike price or below the long put option’s strike price at expiration.
For unbalanced iron condors, the larger spread width must be used to calculate the position’s maximum risk. For example, if the call spread width increases to $6 and the position takes in $1.96, the maximum risk becomes $404 if the underlying price is above the long call option’s strike price at expiration, and $304 if the underlying price is below the long put option's strike price at expiration.
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