LOCO Iron Condor Strategy
LOCO (El Pollo Loco Holdings, Inc.), in the Consumer Cyclical sector, (Restaurants industry), listed on NASDAQ.
El Pollo Loco Holdings, Inc., primarily operating through its El Pollo Loco, Inc. subsidiary, is engaged in the development, franchising, licensing, and direct management of quick-service restaurants under the El Pollo Loco brand. By May 4, 2022, its network encompassed 480 establishments: 189 company-owned locations and 291 franchised outlets situated across California, Nevada, Arizona, Texas, Utah, and Louisiana. The company also licenses a single restaurant operating in the Philippines. Founded in 1975 and headquartered in Costa Mesa, California, the company adopted its current name, El Pollo Loco Holdings, Inc., in April 2014, having previously been known as Chicken Acquisition Corp.
LOCO (El Pollo Loco Holdings, Inc.) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $512.3M, a trailing P/E of 16.96, a beta of 0.71 versus the broader market, a 52-week range of 8.985-16.91, average daily share volume of 332K, a public-listing history dating back to 2014, approximately 4K full-time employees. These structural characteristics shape how LOCO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.71 places LOCO roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a iron condor on LOCO?
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.
Current LOCO snapshot
As of June 29, 2026, spot at $16.57, ATM IV 48.20%, IV rank 16.83%, expected move 13.82%. The iron condor on LOCO below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 81-day expiry.
Why this iron condor structure on LOCO specifically: LOCO IV at 48.20% is on the cheap side of its 1-year range, which means a premium-selling LOCO iron condor collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 13.82% (roughly $2.29 on the underlying). The 81-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated LOCO expiries trade a higher absolute premium for lower per-day decay. Position sizing on LOCO should anchor to the underlying notional of $16.57 per share and to the trader's directional view on LOCO stock.
LOCO iron condor setup
The LOCO iron condor below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With LOCO near $16.57, the first option leg uses a $17.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LOCO chain at a 81-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 LOCO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Call | $17.00 | $1.27 |
| Buy 1 | Call | $18.00 | $0.65 |
| Sell 1 | Put | $16.00 | $1.63 |
| Buy 1 | Put | $15.00 | $0.58 |
LOCO iron condor risk and reward
- Net Premium / Debit
- +$167.00
- Max Profit (per contract)
- $167.00
- Max Loss (per contract)
- $67.00
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- 2.493
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.
LOCO iron condor payoff curve
Modeled P&L at expiration across a range of underlying prices for the iron condor on LOCO. 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 | -99.9% | +$67.00 |
| $3.67 | -77.8% | +$67.00 |
| $7.34 | -55.7% | +$67.00 |
| $11.00 | -33.6% | +$67.00 |
| $14.66 | -11.5% | +$67.00 |
| $18.32 | +10.6% | +$67.00 |
| $21.99 | +32.7% | +$67.00 |
| $25.65 | +54.8% | +$67.00 |
| $29.31 | +76.9% | +$67.00 |
| $32.97 | +99.0% | +$67.00 |
When traders use iron condor on LOCO
Iron condors on LOCO are a delta-neutral premium-collection structure that profits if LOCO stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
LOCO thesis for this iron condor
The market-implied 1-standard-deviation range for LOCO extends from approximately $14.28 on the downside to $18.86 on the upside. A LOCO iron condor is a delta-neutral premium-collection structure that pays off when LOCO 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 LOCO IV rank near 16.83% 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 LOCO at 48.20%. As a Consumer Cyclical name, LOCO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LOCO-specific events.
LOCO 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. LOCO positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LOCO alongside the broader basket even when LOCO-specific fundamentals are unchanged. Short-premium structures like a iron condor on LOCO carry tail risk when realized volatility exceeds the implied move; review historical LOCO earnings reactions and macro stress periods before sizing. Always rebuild the position from current LOCO chain quotes before placing a trade.
Frequently asked questions
- What is a iron condor on LOCO?
- A iron condor on LOCO is the iron condor strategy applied to LOCO (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 LOCO stock trading near $16.57, the strikes shown on this page are snapped to the nearest listed LOCO chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LOCO 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 LOCO iron condor priced from the end-of-day chain at a 30-day expiry (ATM IV 48.20%), the computed maximum profit is $167.00 per contract and the computed maximum loss is $67.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LOCO iron condor?
- The breakeven for the LOCO iron condor priced on this page is no defined breakeven on the modeled curve at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current LOCO market-implied 1-standard-deviation expected move is approximately 13.82%; 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 LOCO?
- Iron condors on LOCO are a delta-neutral premium-collection structure that profits if LOCO stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
- How does current LOCO implied volatility affect this iron condor?
- LOCO ATM IV is at 48.20% with IV rank near 16.83%, 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.