 Welcome to another video lesson from navigationtrading.com. In this video, we're going to be discussing the difference between a condor and an iron condor. Now we have a complete, in-depth, step-by-step course on exactly how to trade iron condors, but we've never really gotten into the difference between an iron condor and a condor, so let's jump in and get started. In this example, we're going to use the S&P 500 ETF ticker SPY. If we go to the trade tab, we typically like to enter these trades between 30 and 60 days to expiration, so in this case, we're going to look at the 37-day options. We typically set this up by starting out around the 20 delta, and we'll just right-click sell iron condor. As this example, we'll use three points wide, so we'll buy the 297 on the call side, and we want about the 20 delta on the put side as well, which is going to be about the 240, so we'll sell the 240 put, and we'll buy three strikes lower, so the 237. Then if we take this over to the analyze screen, this is what your typical iron condor looks like. It's defined risk on both sides. It's set up as fairly delta-neutral with limited cap of a profit potential, as well as defined risk. Before I jump into the plain condor, I want to break down both sides of this iron condor because that'll help you understand what a plain condor is versus the iron condor. Iron condor is really just you're selling an out-of-the-money call vertical spread, and you're selling an out-of-the-money put vertical spread. If we do those separately, so if we say the same strikes, and we sell a call vertical and do it three strikes wide again, so that's 297, I'm going to put that over on the analyze tab, we'll come back to it after we set up our put side, so you've got the 20 delta here, which is the 240, we're going to sell vertical, and move that to the 237. Take this over to the analyze tab, now instead of just setting it up as one trade as an iron condor, we've got it set up as two separate vertical spreads. So here is the put side, you can see the put side there, and then if we uncheck that and we check on the call side, now we've got the call side. And both of those together make up the iron condor. So the main difference is that when you trade a plain condor versus an iron condor, you're using all calls or you're using all puts. So let's look at an example of a call condor, and essentially what you're doing is you're simply just selling an out-of-the-money vertical, so we'll use the same one, 294, 297. We'll take that over to the analyze screen, uncheck these while we're here, and then the other part of it is instead of selling in the put side, we're going to actually buy an in-the-money call vertical. So you'd go up to your in-the-money options, and you'd basically buy a vertical, 242.43. Analyze that. And so when you put those together, what you'll notice is it looks exactly the same. If we sell a call vertical and buy an in-the-money call vertical, both of those boxes are checked, it looks exactly like an iron condor. It's got the defined risk, it's got the range, it's got the max profit, and it's got the defined risk on the other side, exactly like the original iron condor that we just set up. The max profit's the same, the max risk is the same. The difference is we are, instead of selling a put vertical and selling a call vertical, we're just simply selling a call vertical and buying an in-the-money call vertical. So all of these options are calls as opposed to the two calls and two puts. So you might have the question, so why does everybody trade iron condors? Why don't people just trade condors? Why are iron condors so much more popular? Why not just use all calls or all puts instead of using some calls and some puts? Here's why. If you go back to the trade tab, what you'll notice is on the strikes that we chose, the deep in-the-money strikes on the call side, what you'll notice is look at the difference between the bid and the ask. Now the market's moving around, so it's going to jump around a little bit, but you're looking at about a 20 cent difference between the bid and the ask at that point. And so the difference between those is about a 20 cents wide. Well, if you come over to the exact same strike on the put side, look at these. These are three or four cents wide, so you're getting much better pricing on the options when you're selling them out of the money as opposed to going deep in the money. The other thing is now in SPY, the liquidity is going to be good no matter what. I mean, even this one has 22,000 contracts, but most of these are in the couple thousand, four thousand, where the liquidity on the out of the money options is just a little bit better. Again, in SPY, it doesn't make that big of a difference, but if you get to some of these less liquid underlies, then what you're going to see is the difference between the amount of open interest in the out of the money strikes versus the deep in the money can be significant. But regardless of the open interest, the main factor here is the wide bid ask spreads. I mean, that's literally money coming out of your pocket. That's what the market makers keep to place the trade. So the tighter the bid ask spreads, the better off you are in your trading because it means there's less slippage, you keep more of the money when you're placing the trade. So just remember, there's no difference when you look at the risk profile graph and the risk versus return on a condor versus an iron condor. The only difference is the amount of bid ask spread between the strikes and that affects you getting filled and could potentially take a toll on your performance over time because the bid ask spreads are tighter with an iron condor versus a condor. Hope that helps. If you have any questions, feel free to drop us a line in our community at community.navigationtrading.com. See you there.