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Wide Iron Condors

Market Measures

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When initiating an iron condor, increasing the width of its wings can help the trade better mimic the performance of a strangle with much less buying power.

tastytrade's research team examined 20 delta, 45 DTE iron condors with varying widths among $1, $2, $3 and $5. The wider the wings of the iron condor, the larger the average P/L, the larger the ROC, as well as a higher win rate.

Additionally, the team discovered that with the contracts scaled for buying power, the cumulative P/L for $5 wide iron condors is generally larger than $1 wide iron condors, but with lower volatility.

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