---
description: "A neutral volatility strategy selling an ITM call at K1 and OTM call at K4 while buying calls at K2 and K3, collecting credit and profiting from a large move outside [K1, K4]."
tags: [options, volatility, neutral, condor]
---

# Short Call Condor

**Section**: 2.48 | **Asset Class**: Options | **Type**: Volatility

## Overview
The short call condor is a volatility strategy consisting of a short ITM call at K1, a long ITM call at K2, a long OTM call at K3, and a short OTM call at K4. All strikes are equidistant: K4 - K3 = K3 - K2 = K2 - K1 = kappa. This is a relatively low net credit trade. As with a short call butterfly, the potential reward is sizably smaller than with a short straddle or short strangle (albeit with lower risk). So this is a capital gain (rather than income) strategy. The trader's outlook is neutral.

## Construction
- Sell 1 call option at strike K1 (ITM, lowest)
- Buy 1 call option at strike K2 (ITM, K2 > K1)
- Buy 1 call option at strike K3 (OTM, K3 > K2)
- Sell 1 call option at strike K4 (OTM, highest, K4 > K3)
- All same expiry; K2 - K1 = K3 - K2 = K4 - K3 = kappa (equidistant)

Net credit: C

## Payoff Profile
f_T = (S_T - K2)+ + (S_T - K3)+ - (S_T - K1)+ - (S_T - K4)+ + C

- Upper breakeven: S*_up = K4 - C
- Lower breakeven: S*_down = K1 + C
- Max profit: P_max = C  (if S_T <= K1 or S_T >= K4)
- Max loss: L_max = kappa - C  (if K2 <= S_T <= K3 at expiry)

## Key Conditions / Signals
- Neutral; expects stock to move significantly outside the [K1, K4] range
- High implied volatility environment; collect larger credit upfront
- Defined risk on both sides, making it safer than a short straddle

## Notes
The short call condor is the reverse of the long call condor. Net credit is collected and the strategy profits from large moves in either direction. Maximum loss is kappa - C, occurring if the stock stays in the middle zone [K2, K3].