Iron Condor Traded in Biogen

Biogen Idec (NASDAQ: BIIB) is receiving a large Iron Condor this morning. An iron condor is a “limited risk, non-directional option trading strategy that is designed to have a large probability of earning a small limited profit when the underlying security is perceived to have low volatility. The iron condor strategy can be visualized as a combination of a bull put spread and a bear call spread.

The Biogen Idec March $45/50/55/60 iron condor traded this morning for roughly $1.70. The maximum gain on the trade is $1.70 and this will be taken down if the stock is between 50 and 55 at expiration. The maximum loss is $3.30, which is the difference between strikes minus the credit taken in. this max loss will be taken if the stock is above 60 or below 45 at expiration. Varying PnL will be had if the stock is between $45-60 at expiration.

Note: credit to Chris McKann over at optionsMonster for flagging this trade.