Iron Condor Adjustments - Rolling the Untested Side and Going Inverted
Reviewed by Leon Moyer - Published October 9, 2026 - Last reviewed October 9, 2026
In this lesson
Calculate how rolling an iron condor's untested side changes its maximum profit, maximum loss and break-evens, and explain the guaranteed loss built into an inverted condor.
An iron condor adjustment changes one or more of the condor's spreads after the stock moves toward a short strike. A common one is rolling the untested side: buying back the spread the stock is moving away from and selling a new one closer to the stock, in the same expiration, for extra credit. That credit lowers the whole trade's maximum loss and lifts the break-even on the tested side, but it narrows the range where the trade makes money.
An iron condor is a bull put spread and a bear call spread sold together, so everything in How to Roll a Credit Spread applies to each side. What is new is that the two sides interact.
What are the numbers on the original iron condor?
Worked example
The XYZ 40/45/55/60 iron condor
XYZ trades at $50. With 45 days left, at the calculator's model prices with 40% implied volatility, you sell:
- the 45/40 put spread for $0.81 - $0.14 = $0.67, and
- the 55/60 call spread for $1.16 - $0.38 = $0.78.
The total credit is $1.45 ($145). Only one side can finish in the money, so the risk is one spread's width:
- Maximum profit: $145, if XYZ is between $45 and $55 at expiration.
- Maximum loss: ($5 - $1.45) x 100 = $355, below $40 or above $60.
- Break-evens: $45 - $1.45 = $43.55 and $55 + $1.45 = $56.45.
Illustrative and hypothetical. The ticker and prices are invented for teaching, and the figures exclude commissions, fees, margin interest and taxes, which reduce real results. Past or hypothetical outcomes do not indicate future results.
How do you roll the untested side of an iron condor?
Three weeks later, with 24 days left, XYZ has rallied to $55. The call side is tested: the call spread now costs $1.65 to buy back ($2.33 - $0.68). The put side is untested and almost worthless: the 45/40 put spread can be bought back for $0.04.
Worked example
Rolling the put spread up from 45/40 to 50/45
In one order (or two spread orders) you:
- Buy back the 45/40 put spread for $0.04, banking $0.67 - $0.04 = $0.63 on it.
- Sell a 50/45 put spread in the same expiration for $0.44 (the 50 put at $0.48 less the 45 put at $0.04).
The roll is a $0.40 net credit. Tracking the whole trade as one campaign, as Course 2's How to Track Options Rolls and Adjustments lesson teaches, it has now collected $1.45 + $0.40 = $1.85. The position is a 45/50/55/60 condor with that total credit:
- Maximum profit: $185, if XYZ finishes between $50 and $55.
- Maximum loss: ($5 - $1.85) x 100 = $315, below $45 or above $60.
- Break-evens: $50 - $1.85 = $48.15 and $55 + $1.85 = $56.85.
Illustrative and hypothetical. The ticker and prices are invented for teaching, and the figures exclude commissions, fees, margin interest and taxes, which reduce real results. Past or hypothetical outcomes do not indicate future results.
Rolling the untested put spread up from 45/40 to 50/45
Hover or tap the chart, or focus it and use the arrow keys, to read any price.
Open this trade in the free calculatorShow as table
Compare it with doing nothing. The worst case on the call side improved from $355 to $315, and the upside break-even moved from $56.45 to $56.85. The price is on the put side: before the roll, XYZ falling back to $46 would have been maximum profit. Now it is a $215 loss, because the new short 50 put is in the money. The adjustment is a bet that the stock stays between $48.15 and $56.85, not a free reduction in risk.
What is an inverted iron condor?
Suppose instead XYZ is at $58 with 24 days left, and you roll the put side all the way up to 57/52, above the 55 short call. The condor is now inverted: the short put strike is higher than the short call strike.
Worked example
Going inverted with XYZ at $58
You buy back the old 45/40 put spread for $0.01 and sell the 57/52 put spread for $1.81 - $0.39 = $1.42, a $1.41 net credit. The whole trade has collected $1.45 + $1.41 = $2.86.
At expiration, any price between $55 and $57 leaves both short options in the money by a combined $2.00 ($57 - $55). Outside that band one of them is in the money by more. So at least $2.00 of the $2.86 is always lost, and:
- Maximum profit: $2.86 - $2.00 = $0.86, or $86, between $55 and $57.
- Maximum loss: ($5 - $2.86) x 100 = $214, below $52 or above $60.
- Break-evens: $57 - $2.86 = $54.14 and $55 + $2.86 = $57.86.
Illustrative and hypothetical. The ticker and prices are invented for teaching, and the figures exclude commissions, fees, margin interest and taxes, which reduce real results. Past or hypothetical outcomes do not indicate future results.
Going inverted: put spread rolled to 57/52 with XYZ at $58
Hover or tap the chart, or focus it and use the arrow keys, to read any price.
Open this trade in the free calculatorShow as table
Inverting cut the worst case from $355 to $214, and if XYZ finished at $58, the original condor left alone would lose $155 while the inverted one would lose only $14. But the best possible result is now $86, the band that earns it is only $2 wide, and the total credit must exceed the strike overlap or the trade cannot make money at all. Inverting is damage control, not a fresh opportunity.
What other iron condor adjustments are there?
- Close the tested side, keep the untested side. This stops further losses on the side under pressure and lets the cheap side expire. It realizes the tested side's loss.
- Roll the whole condor out in time. Buy back both spreads and sell a new condor further out, ideally for a net credit. The strike-width rule still holds: the maximum loss is the width minus the total credit collected.
- Close the whole trade. If the stock is through a short strike and no adjustment is a trade you would open fresh (the test from Course 2's When to Roll Options lesson), closing is often the cleanest choice.
Whatever you choose, the short legs remain American-style options that can be assigned before expiration, especially when deep in the money or, for short calls, just before an ex-dividend date, as the Options Industry Council explains. Brokers must approve an account before it can trade options under FINRA Rule 2360, and four-leg spreads usually need a higher approval level and a margin account; the levels and requirements differ by broker.
Check your understanding
An iron condor with 5-wide wings was opened for $1.45. Rolling the untested side adds $0.40 of credit. What is the new maximum loss?
Show answer
$315. The total credit becomes $1.85, and the maximum loss is ($5 - $1.85) x 100.
After the roll to a 50/45 put spread, why does XYZ at $46 at expiration now lose money?
Show answer
The new short 50 put is $4 in the money, and the long 45 put does not help above $45. The $4.00 loss on the put spread is larger than the $1.85 collected, so the trade loses $215.
An inverted condor has a short 57 put and a short 55 call. What is the least it can lose at expiration, before credits?
Show answer
$2.00 per share, or $200 per contract: between $55 and $57 both short options are in the money by a combined $2.00, and outside that band one of them is in the money by more.
Key takeaways
- Rolling the untested side toward the stock collects credit that lowers the maximum loss and moves the tested break-even out.
- The cost is a narrower profit zone and new risk if the stock reverses toward the side you moved.
- An inverted condor locks in a loss equal to the overlap between the short strikes; it only makes money if the total credit exceeds that overlap.
- With equal wings, the maximum loss at expiration is one wing's width minus the total credit collected across every order (assignment and pin risk aside).
Common questions
How do you adjust an iron condor when the stock moves?
A common adjustment is to roll the untested side, the spread the stock is moving away from, closer to the stock for extra credit. That credit lowers the maximum loss on the tested side, at the cost of a narrower profit zone. Other choices are closing the tested side, rolling the whole condor out in time, or closing the trade.
What is an inverted iron condor?
An iron condor whose short put strike is above its short call strike, usually after rolling the untested side past the tested one. At expiration, between the two short strikes both short options are in the money by a combined amount equal to the overlap, and outside that band one of them is in the money by more, so the overlap is a loss locked into the position.
When should you close an iron condor instead of adjusting it?
When it reaches your profit target, when a short strike is breached and no adjustment you would open fresh is available, or before expiration week to avoid pin and assignment risk. Writing these rules down before opening the condor makes the call far easier.
Does rolling the untested side reduce risk?
It reduces the maximum loss by the credit collected, but it adds risk on the side you moved: a reversal back toward the old strikes can now produce a loss where it used to be maximum profit.