Not all stocks are suitable for iron condor trading. Some have gap risk that explodes your position. Others have so little volume that you can't close when you need to.
The best iron condor stocks share specific characteristics:
- High implied volatility (rich premiums)
- Liquid options (tight bid/ask spreads)
- Moderate realized volatility (not too wild intraday)
- Predictable earnings (or far from earnings)
- Good price levels (not extended rallies)
This guide shows you exactly how to screen for iron condor candidates—and gives you my top 10 picks for 2025.
Screen for condor candidates: Our ETF & Stock Finder helps you identify liquid underlyings with good IV characteristics. Then use the Strategy Analyzer to analyze individual legs of your iron condor.
Iron Condor Stock Screening Criteria
Criterion 1: Implied Volatility (IV) Level
The Sweet Spot: 40-70th IV Percentile
Why?
| IV Percentile | Premium | Risk | Best For |
|---|---|---|---|
| 0-25th (Low) | Weak premiums | Low crash risk | Skip—not worth it |
| 25-50th (Normal) | Good premiums | Normal risk | Okay, but not ideal |
| 50-75th (Elevated) | Rich premiums | Manageable risk | IDEAL |
| 75-100th (Extreme) | Excellent premiums | High IV crush risk | Risky; only wide width |
Example:
SPY at 50th percentile IV:
Sell 35-delta calls, collect $0.50 credit
Good trade setup
SPY at 75th percentile IV (VIX spiked):
Sell 35-delta calls, collect $0.80 credit
Looks amazing, but IV crush is coming
When IV normalizes, trade value drops
Not worth the risk
How to Check IV:
- Most brokers show "IV Rank" or "IV Percentile" in options chain
- Or use cboe.com to see IV levels
- Compare current IV to 52-week range
Criterion 2: Option Liquidity (Bid/Ask Spreads)
Requirement: Bid/Ask Spread < 1 Cent
Why?
Good liquidity (Bid $0.45, Ask $0.50):
Spread: $0.05
4-leg iron condor setup
Total slippage: ~$0.20 across 4 legs
Acceptable
Poor liquidity (Bid $0.30, Ask $0.70):
Spread: $0.40
4-leg iron condor setup
Total slippage: ~$1.60 across 4 legs
Kills profitability
How to Check Liquidity:
- Open options chain on your broker
- Look at bid/ask spreads for calls and puts
- Avoid if spreads are wide (more than 2-3 cents)
- Liquid stocks: SPY, QQQ, IWM, XLK, XLF, XLV, etc.
Criterion 3: Earnings Dates (Avoid!)
Rule: 30+ Days Until Next Earnings
Why?
Earnings within 30 days = Elevated vol crush risk
Scenario:
You sell iron condor 45 DTE
Earnings in 14 days
Stock gaps $5 overnight on earnings
Both sides of your condor breached
Max loss realized before management time
Better: Wait until earnings has passed
Where to Check:
- Earnings dates on Yahoo Finance, Earnings Whispers, or your broker
Criterion 4: Realized Volatility (Historical Moves)
Requirement: Average True Range (ATR) 1-3% Daily
Why?
| Daily ATR | Characteristic | IC Risk |
|---|---|---|
| < 0.5% | Extremely stable | Too boring; premiums weak |
| 0.5-1% | Stable | Good, moderate premiums |
| 1-3% | Normal stock volatility | IDEAL for iron condors |
| 3-5% | High volatility | Risky; position likely to breach |
| > 5% | Extreme volatility | Too risky for standard IC |
Example:
SPY average daily move: 0.8%
Standard 30-DTE iron condor width: $4 (±2% range)
Risk: 2.5 standard deviations (very safe, ~99.4% prob of profit)
TSLA average daily move: 3.5%
Would need width: $15+ (±3.5% range)
Capital risk: Too high
Better: Skip TSLA for standard iron condors
How to Calculate ATR:
- Most charting platforms show ATR automatically
- 14-period ATR is standard
- Divide by current stock price to get %
Criterion 5: Current Price Trend
Requirement: Not in Extended Rally or Breakdown
Why?
NVDA in downtrend, down 30% from highs:
IV elevated, momentum negative
Selling calls would miss downside
Selling puts risky (could collapse further)
Result: Iron condor gets breached on both sides
MSFT in mild uptrend, up 20% YTD:
IV normal, trend is gradual
Room for 5%+ move in either direction
Iron condor width reasonable
Result: Condor fits between support and resistance
How to Check:
- Look at 6-month chart
- Is stock near 52-week high? (risky)
- Is stock near 52-week low? (risky)
- Is stock in middle 40-60% of 52-week range? (better)
Iron Condor Screening Formula
Combine all criteria:
Iron Condor Candidate Checklist:
✓ IV Rank: 40-75th percentile (rich premiums, not extreme)
✓ Bid/Ask spread: < $0.03 for each option leg
✓ Earnings: 30+ days away (no binary event risk)
✓ Average daily range: 1-3% (manageable volatility)
✓ Price position: Not extended (40-60% of 52-week range)
✓ Liquidity: 1M+ shares traded daily
✓ Stock price: $20+ (avoid penny stocks)
Score: Each criterion = 1 point
Target: 6-7 points (most criteria met)
Top 10 Iron Condor Stocks for 2025
Based on the screening criteria above, here are my top candidates:
1. SPY (S&P 500 ETF)
| Metric | Rating |
|---|---|
| Liquidity | Perfect |
| IV Percentile | 50-60 (normal) |
| Bid/Ask Spread | <$0.01 (best in market) |
| Earnings Risk | N/A (no earnings) |
| Daily Move (ATR) | 0.8% (ideal) |
| Current Price Trend | Neutral to up |
| Best DTE for IC | 30-45 days |
Why: Most liquid options in the world. Premiums always available. Bid/ask spreads are essentially free. Perfect for learning iron condors.
Typical Setup:
- 30-45 DTE
- $4 width ($446/$454 range on $450 SPY)
- Collect $0.40-0.50 credit
- 70%+ probability of profit
2. QQQ (NASDAQ 100 ETF)
| Metric | Rating |
|---|---|
| Liquidity | Excellent |
| IV Percentile | 55-65 (elevated but stable) |
| Bid/Ask Spread | <$0.02 (excellent) |
| Earnings Risk | N/A (no earnings) |
| Daily Move (ATR) | 1.2% (above SPY, but manageable) |
| Current Price Trend | Often trending |
| Best DTE for IC | 30-45 days |
Why: Tech-heavy, slightly higher volatility than SPY. Good premiums. Still highly liquid.
Typical Setup:
- 30-45 DTE
- $3-4 width ($397/$403 range on $400 QQQ)
- Collect $0.35-0.50 credit
- 68-72% probability of profit
3. IWM (Russell 2000 Small-Cap ETF)
| Metric | Rating |
|---|---|
| Liquidity | Good |
| IV Percentile | 60-70 (elevated) |
| Bid/Ask Spread | <$0.05 (acceptable) |
| Earnings Risk | N/A (no earnings) |
| Daily Move (ATR) | 1.5% (moderate) |
| Current Price Trend | Rotating sector |
| Best DTE for IC | 30-45 days |
Why: Higher IV means richer premiums than SPY/QQQ. Still liquid enough for retail traders.
Typical Setup:
- 30-45 DTE
- $3-4 width ($190/$194 range on $192 IWM)
- Collect $0.40-0.60 credit
- 65-70% probability of profit
4. MSFT (Microsoft)
| Metric | Rating |
|---|---|
| Liquidity | Excellent |
| IV Percentile | 50-60 (normal to elevated) |
| Bid/Ask Spread | <$0.02 |
| Earnings Risk | Q1 (Jan), Q2 (Apr), Q3 (Jul), Q4 (Oct) |
| Daily Move (ATR) | 1.0% (stable) |
| Current Price Trend | Long-term uptrend (be careful of width) |
| Best DTE for IC | 30-45 days (avoid 2 weeks pre-earnings) |
Why: Mega-cap tech with excellent liquidity. Options are always available. Stable company means predictable moves.
Typical Setup:
- 30-45 DTE
- $5-6 width (MSFT is higher priced, so wider width in $ terms)
- Collect $0.30-0.50 credit
- 65-70% probability of profit
Caution: Check earnings calendar. Avoid 3 weeks before earnings.
5. AAPL (Apple)
| Metric | Rating |
|---|---|
| Liquidity | Excellent |
| IV Percentile | 45-55 (normal) |
| Bid/Ask Spread | <$0.02 |
| Earnings Risk | Q1 (Jan), Q2 (Apr), Q3 (Jul), Q4 (Oct) |
| Daily Move (ATR) | 1.2% (slightly elevated) |
| Current Price Trend | Range-bound |
| Best DTE for IC | 30-45 days |
Why: Liquid, stable, and familiar. Many retail traders already hold AAPL shares.
Typical Setup:
- 30-45 DTE
- $4-5 width
- Collect $0.30-0.45 credit
- 65-70% probability of profit
6. XLK (Technology ETF)
| Metric | Rating |
|---|---|
| Liquidity | Good |
| IV Percentile | 55-65 (elevated for sector) |
| Bid/Ask Spread | <$0.03 |
| Earnings Risk | N/A (ETF of multiple companies) |
| Daily Move (ATR) | 1.0% (stable) |
| Current Price Trend | Tech sector rotation |
| Best DTE for IC | 30-45 days |
Why: Sector exposure (MSFT, AAPL, NVDA, INTC) without single-company earnings risk. Diversified.
Typical Setup:
- 30-45 DTE
- $2-3 width
- Collect $0.35-0.50 credit
- 70%+ probability of profit
7. XLF (Financial Sector ETF)
| Metric | Rating |
|---|---|
| Liquidity | Good |
| IV Percentile | 50-60 (normal) |
| Bid/Ask Spread | <$0.03 |
| Earnings Risk | N/A (ETF of multiple companies) |
| Daily Move (ATR) | 1.1% (stable) |
| Current Price Trend | Sector dependent (rates-sensitive) |
| Best DTE for IC | 30-45 days |
Why: Banking sector exposure. Good premiums from sector volatility. Liquid options.
Typical Setup:
- 30-45 DTE
- $2-3 width
- Collect $0.35-0.50 credit
- 70%+ probability of profit
8. GLD (Gold ETF)
| Metric | Rating |
|---|---|
| Liquidity | Excellent |
| IV Percentile | 40-50 (low, but consistent) |
| Bid/Ask Spread | <$0.02 |
| Earnings Risk | N/A (commodity ETF) |
| Daily Move (ATR) | 0.7% (very stable) |
| Current Price Trend | Dollar-dependent |
| Best DTE for IC | 30-45 days |
Why: Gold moves predictably, highly liquid, less affected by earnings. Good for portfolio diversification (inverse correlation with equities).
Typical Setup:
- 30-45 DTE
- $1-2 width (gold lower-priced, so lower $ width)
- Collect $0.25-0.40 credit
- 70-75% probability of profit
9. EEM (Emerging Markets ETF)
| Metric | Rating |
|---|---|
| Liquidity | Good |
| IV Percentile | 50-60 (normal) |
| Bid/Ask Spread | <$0.05 (acceptable) |
| Earnings Risk | N/A (ETF of multiple companies) |
| Daily Move (ATR) | 1.3% (moderate) |
| Current Price Trend | Sector/macro dependent |
| Best DTE for IC | 30-45 days |
Why: International diversification, good premiums, liquid options. Different volatility profile than US markets.
Typical Setup:
- 30-45 DTE
- $1-2 width
- Collect $0.25-0.35 credit
- 65-70% probability of profit
10. TLT (Bond ETF)
| Metric | Rating |
|---|---|
| Liquidity | Good |
| IV Percentile | 40-50 (lower, stable) |
| Bid/Ask Spread | <$0.05 |
| Earnings Risk | N/A (bond ETF) |
| Daily Move (ATR) | 0.5-1.0% (very stable) |
| Current Price Trend | Rate-dependent |
| Best DTE for IC | 30-45 days |
Why: Bonds move in opposite direction to stocks. Hedge portfolio during equity volatility. Very stable, predictable moves.
Typical Setup:
- 30-45 DTE
- $0.50-1.00 width (bonds have lower volatility)
- Collect $0.15-0.25 credit
- 75%+ probability of profit (but lower premium)
Stocks to AVOID for Iron Condors
| Stock Characteristic | Why It's Bad | Examples |
|---|---|---|
| Pre-earnings (3 weeks before) | Gap risk overnight | Any stock in earnings month |
| Extreme IV (> 80 percentile) | IV crush eats profits | MSTR (Bitcoin tracking) |
| Illiquid options (spread > $0.10) | Can't exit cleanly | Penny stocks, micro-cap |
| High daily volatility (ATR > 5%) | Breaches too easy | TSLA, GME, MEME stocks |
| Extended rally (52-week high) | Momentum exhaustion risk | Recently IPO'd stocks |
| Extended breakdown (52-week low) | Crash risk high | Distressed companies |
| News/event driven | Unpredictable gaps | Pre-split announcement stocks |
Seasonal Iron Condor Patterns
Q1 (Jan-Mar): Tech and Growth Strength
Best candidates: QQQ, MSFT, AAPL, XLK
IV trend: Typically low early Jan (post-holiday), then spikes
Strategy: Wait for post-earnings IV spike
Q2 (Apr-Jun): Broad Market, Earnings Season Peak
Best candidates: SPY, IWM, XLF, XLV
IV trend: Elevated mid-quarter (earnings cluster), drops post-earnings
Strategy: Enter early quarter, adjust before earnings
Q3 (Jul-Sep): Summer Doldrums
Best candidates: IWM, Treasuries (TLT), GLD
IV trend: Often lower in summer (slower markets)
Strategy: Widen positions, lower premiums expected
Q4 (Oct-Dec): Volatility Spikes, Year-End
Best candidates: SPY, QQQ, GLD, EEM
IV trend: Often elevated mid-quarter (seasonal volatility), spikes Nov-Dec
Strategy: Tight width positions, defensive setup
Practical Screening Workflow
Step 1: Start with liquid ETFs
Restrict to: SPY, QQQ, IWM, GLD, TLT
(These are always tradable, great for learning)
Step 2: Check IV Rank (% vs 52-week range)
Only trade if IV Rank 40-75%
IV Rank = (Current IV - 52-week Low IV) / (52-week High IV - 52-week Low IV)
Example: IV at 30, 52-week range 15-50
IV Rank = (30-15) / (50-15) = 43% ✓ Good to trade
Step 3: Verify Bid/Ask Spreads
Look at 30-45 DTE strikes:
- Calls: Bid/ask spread < $0.03
- Puts: Bid/ask spread < $0.03
Step 4: Check Earnings Calendar
Mark earnings dates (30+ days clear required)
Step 5: Screen for Technical Setup
- Support level (below your put short strike)
- Resistance level (above your call short strike)
- Current price: Middle 50% of range
Step 6: Size Your Position
Based on width and max loss tolerance
The Bottom Line: Best Stocks for Iron Condors
Iron condors work best on:
✅ Liquid ETFs (SPY, QQQ, IWM)
✅ High-IV environments (50-75 percentile)
✅ Post-earnings (30+ days until next event)
✅ Stable, range-bound markets (not extended trends)
✅ Multi-leg options chains (tight spreads)
Start with SPY or QQQ. Master the mechanics. Then expand to sector ETFs (XLK, XLF, XLV) and individual stocks (MSFT, AAPL).
Avoid penny stocks, pre-earnings, and extreme volatility. Stick to the screened candidates above, and your iron condor probability of profit will stay at 65-75%+.
Next Steps
Ready to find your first iron condor candidate?
First: Open your broker's options screener or use free tools like FinViz.
Second: Filter for IV Rank 40-75% and bid/ask spreads <$0.03.
Third: Paper trade on SPY for 2-3 cycles to master the mechanics.
Fourth: When confident, trade one real iron condor per quarter.
Start simple, stay disciplined, and let the odds work for you.