Iron Condor — ASX Playbook (R2)

Practical, Australia-focused iron condor playbook for ASX options traders. Explore selection, sizing, adjustments, margin and tax-aware guidance tailored to Australian markets.

Strategy: neutral income with defined risk
Markets: ASX options on stocks and ETFs
Key focus: risk control, margin and rolling rules

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Author

Alex Harper

Options strategist — Newoptionzone

Experience: ASX options, volatility management, defined-risk spreads.

Anatomy of the Iron Condor

Structure

Sell a put spread and sell a call spread — both out of the money — to collect premium while defining max risk.

Short OTM put + long further OTM put
Short OTM call + long further OTM call
Net credit received = maximum profit

Suitable for low-volatility, range-bound expectations

When to trade

Neutral outlook, implied vol above realised but not spiking.

Timing

Ideally 30–60 days to expiry for balanced premium vs time decay.

Delta selection

Use short strikes with deltas ~0.12–0.25 depending on conviction and margin.

Setup & Sizing (ASX specifics)

Checklist and sizing rules tuned for ASX equities and ETFs — watch margin, lot sizes and assignment windows (ASX has specific exercise/assignment rules and trading hours).

Item	Guideline
Max capital per trade	1–3% of portfolio risk
Width	Typically 5–10% strike width on ASX liquid names
Expiry	30–60 days preferred
Position sizing	Use contract multiples & broker margin limits

Quick rule

Never risk more than the max loss defined by your widest spread per iron condor.

Risk Management & Adjustments

A disciplined adjustment plan preserves capital and reduces margin shocks. Below are standard adjustments and when to apply them.

Increase width or roll the threatened side outward to reduce delta exposure; evaluate added capital and margin impact on ASX broker.

When movement favours one side, tighten the profitable side or accept a directional bias to reduce risk.

Predefine profit targets (e.g., 50–70% of max credit) and exit to lock gains — factor ASX liquidity & spreads.

Margin & Assignment

Understand broker margin formulas and AM settlement windows. Monitor early assignment risk around ex-dividend dates.

Tip: keep extra cash or hedges to meet sudden margin calls.

Case Study: ASX300 ETF Iron Condor

Example trade on a liquid ASX ETF. Details below are illustrative—always run through your broker's margin simulator and consider tax/timing implications in Australia.