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Bullish Patterns
Long Calls
Bull Call Spread
Bull Put Spread
Call Backspread
Long Call Ratio Spread
Naked Put
Synthetic Long Stock
The Collar
Covered Calls
Synthetic Long Call
Synthetic Short Put
Covered Straddle
Covered Strangle
Married Put
Protective Put

Bearish Patterns
Long Puts
Bear Put Spread
Bear Call Spread
Put Backspread
Long Put Ratio Spread
Naked Calls
Synthetic Short Stock
Synthetic Short Stock (split strikes)
Covered Put
Protective Call
Synthetic Short Call
Synthetic Long Put

Long Volatility
Long Straddle
Long Strangle
Short Call Butterfly
Short Put Butterfly
Short Iron Butterfly
Short Call Condor
Short Put Condor
Short Iron Condor
Long Guts
Strip
Strap
Short Call Ladder
Short Put Ladder
Long Call Synthetic Straddle
Long Put Synthetic Straddle

Short Volatility
Short Straddle
Short Strangle
Long Call Butterfly
Long Put Butterfly
Long Iron Butterfly
Long Call Condor
Long Put Condor
Long Iron Condor
Short Guts
Long Call Ladder
Long Put Ladder
Call Ratio Spread
Short Call Ratio Spread
Put Ratio Spread
Short Put Ratio Spread
Ratio Call Write
Ratio Put Write
Short Call Synthetic Straddle
Short Put Synthetic Straddle
Variable Ratio Write

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Long Put Condor

Risk: limited
Reward: limited

General Description
Entering a long put condor entails buying (1) lower strike put, selling (1) middle strike put, selling (1) higher middle strike put and buying (1) higher strike put (same expiration month, distance between the two lower legs is equal to the distance between the two upper legs). It's essentially a combination of a lower strike bull put spread and a higher strike bear put spread, and it's similar to a long put butterfly except the short puts are spread out over two strikes.

(draw a long put condor risk diagram here)

The Thinking
You're confident a stock will trade in a tight range and not move much from its current position. You employ a lower strike bull put spread, which achieves max profitability when the stock rallies, and a higher strike bear put spread, which achieves max profitability when the stock drops. If you're correct, if the stock doesn't stray too far (preferably stays between the two middle strikes), you'll make money on both legs of the overall strategy.

Example
XYZ is trading at $57.50. You sell (1) 55 put for $2.00 and buy (1) 50 put for $0.50 to complete the bull put spread. Then you sell (1) 60 put for $5.00 and buy (1) 65 put for $9.00 to complete the bear put spread. The net debit is $2.50.

Above the highest strike, all puts expire worthless, and your loss is the net debit paid when the trade was initiated.

Below the lowest strike, all puts are in-the-money and exactly cancel each other out. Your loss is the net debit paid when the trade was initiated. For example, if the stock is at $45, the 50 put will be worth $5 ($4.50 profit), the 55 puts will be worth $10 ($8.00 loss), the 60 put will be worth $15 ($10.00 loss) and the 65 put will be worth $20 ($11.00 profit). The net of this is a $2.50 loss.

Between the middle strikes ($55 and $60), max profitability is achieved. After all, that’s where the lower bull put spread and upper bear put spread are both in their max profit zones. As an example, at $57.5, the 50 and 55 puts will be worthless ($0.50 loss and $2.00 gain), the 60 put will be worth $2.50 ($2.50 profit) and the 65 put will be worth $7.50 ($1.50 loss). The net of this is a $2.50 profit.

The PL chart below graphically shows where this trade will be profitable and at a loss.