FANG Iron Condor Strategy
FANG (Diamondback Energy, Inc.), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NASDAQ.
Diamondback Energy, Inc. operates as an independent enterprise focused on oil and natural gas. Its core business involves the acquisition, development, exploration, and production of unconventional and onshore hydrocarbon reserves, predominantly located within the Permian Basin across West Texas and New Mexico. The company's development efforts primarily target significant geological formations, including the Spraberry and Wolfcamp in the Midland Basin, as well as the Wolfcamp and Bone Spring within the Delaware Basin – both crucial components of the broader Permian. As of December 31, 2021, Diamondback Energy's asset base included approximately 524,700 gross acres under its control in the Permian Basin. At that time, its estimated proved oil and natural gas reserves amounted to 1,788,991 thousand barrels of crude oil equivalent. The company also maintained working interests in 5,289 gross producing wells and held royalty interests in an additional 6,455 wells.
FANG (Diamondback Energy, Inc.) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $56.50B, a trailing P/E of 35.61, a beta of 0.42 versus the broader market, a 52-week range of 134.3-214.51, average daily share volume of 2.5M, a public-listing history dating back to 2012, approximately 2K full-time employees. These structural characteristics shape how FANG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.42 indicates FANG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 35.61 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. FANG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a iron condor on FANG?
An iron condor sells a call spread and a put spread at strikes outside spot, collecting net premium that is kept if the underlying stays inside the inner short strikes.
FANG snapshot
As of August 14, 2026, spot at $202.45, ATM IV 32.50%, IV rank 24.55%, expected move 9.32%. The iron condor on FANG below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this iron condor structure on FANG specifically: FANG IV at 32.50% is on the cheap side of its 1-year range, which means a premium-selling FANG iron condor collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 9.32% (roughly $18.86 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FANG expiries trade a higher absolute premium for lower per-day decay. Position sizing on FANG should anchor to the underlying notional of $202.45 per share and to the trader's directional view on FANG stock.
FANG iron condor setup
The FANG iron condor below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With FANG at $202.45 on that close, the first option leg uses a $210.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FANG chain at a 35-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 FANG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Call | $210.00 | $5.20 |
| Buy 1 | Call | $220.00 | $2.55 |
| Sell 1 | Put | $190.00 | $3.23 |
| Buy 1 | Put | $180.00 | $1.38 |
FANG iron condor risk and reward
- Net Premium / Debit
- +$450.00
- Max Profit (per contract)
- $450.00
- Max Loss (per contract)
- -$550.00
- Breakeven(s)
- $185.50, $214.50
- Risk / Reward Ratio
- 0.818
Max profit equals the net credit times 100 inside the inner strikes; max loss equals wing width minus credit times 100. Two breakevens at inner strikes plus and minus the credit.
FANG iron condor payoff curve
Modeled P&L at expiration across a range of underlying prices for the iron condor on FANG. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$550.00 |
| $44.77 | -77.9% | -$550.00 |
| $89.53 | -55.8% | -$550.00 |
| $134.30 | -33.7% | -$550.00 |
| $179.06 | -11.6% | -$550.00 |
| $223.82 | +10.6% | -$550.00 |
| $268.58 | +32.7% | -$550.00 |
| $313.34 | +54.8% | -$550.00 |
| $358.10 | +76.9% | -$550.00 |
| $402.87 | +99.0% | -$550.00 |
When traders use iron condor on FANG
Iron condors on FANG are a delta-neutral premium-collection structure that profits if FANG stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
FANG thesis for this iron condor
The market-implied 1-standard-deviation range for FANG extends from approximately $183.59 on the downside to $221.31 on the upside. A FANG iron condor is a delta-neutral premium-collection structure that pays off when FANG stays inside the inner short strikes through expiration; the wing width should reflect the trader's tolerance for the maximum loss scenario where the underlying breaches an outer strike. Current FANG IV rank near 24.55% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on FANG at 32.50%. As a Energy name, FANG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FANG-specific events.
FANG iron condor positions are structurally neutral / range-bound; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. FANG positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FANG alongside the broader basket even when FANG-specific fundamentals are unchanged. Short-premium structures like a iron condor on FANG carry tail risk when realized volatility exceeds the implied move; review historical FANG earnings reactions and macro stress periods before sizing. Always rebuild the position from current FANG chain quotes before placing a trade.
Frequently asked questions
- What is a iron condor on FANG?
- A iron condor on FANG is the iron condor strategy applied to FANG (stock). The strategy is structurally neutral / range-bound: An iron condor sells a call spread and a put spread at strikes outside spot, collecting net premium that is kept if the underlying stays inside the inner short strikes. With FANG stock at $202.45 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed FANG chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are FANG iron condor max profit and max loss calculated?
- Max profit equals the net credit times 100 inside the inner strikes; max loss equals wing width minus credit times 100. Two breakevens at inner strikes plus and minus the credit. For the FANG iron condor priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 32.50%), the computed maximum profit is $450.00 per contract and the computed maximum loss is -$550.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FANG iron condor?
- The breakeven for the FANG iron condor priced on this page is roughly $185.50 and $214.50 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The FANG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a iron condor on FANG?
- Iron condors on FANG are a delta-neutral premium-collection structure that profits if FANG stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
- How does current FANG implied volatility affect this iron condor?
- FANG ATM IV is at 32.50% with IV rank near 24.55%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.