When we are constructing an iron condor, an important factor to consider is the width of its wings. Today, we will walk through the performance of iron condor with narrow wings.
According to our study on 16 delta and 30 delta iron condors with $1 wide wings on SPY, the extreme situations would wipe out most of their profits, which makes their average P/L barely positive. And based on our study, the performance of $1 wide iron condors only slightly increased when we entered the trades in high IV environment.
Therefore, the wings of an iron condor should be wider than 1 dollar if the iron condor aims to be significantly profitable.