PSEC Iron Condor Strategy
PSEC (Prospect Capital Corporation), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
Prospect Capital Corporation operates as a Business Development Company (BDC), providing diverse financing solutions predominantly to the middle market. The firm engages in a broad spectrum of investment activities, including growth capital, leveraged buyouts, acquisitions, recapitalizations, refinancing, and turnaround situations for mature, emerging, and later-stage companies. Its specialized offerings encompass mezzanine financing, subordinated debt tranches of collateralized loan obligations (CLOs), cash flow term loans, marketplace lending, and bridge transactions. Beyond corporate finance, Prospect Capital also allocates capital to real estate, with a specific focus on multi-family residential assets. The company deploys a variety of investment instruments, such as secured debt (including senior, unitranche, first-lien, and second-lien), private debt, mezzanine debt, and direct equity, primarily targeting private and microcap public businesses. Its investment strategy involves both primary originations and the acquisition of secondary loan portfolios, supporting situations like private equity-backed financings, corporate expansion, dividend recapitalizations, and real estate ventures.
PSEC (Prospect Capital Corporation) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $1.15B, a beta of 0.78 versus the broader market, a 52-week range of 2.11-3.13, average daily share volume of 5.4M, a public-listing history dating back to 2004, approximately 130 full-time employees. These structural characteristics shape how PSEC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.78 places PSEC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PSEC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a iron condor on PSEC?
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.
PSEC snapshot
As of August 14, 2026, spot at $2.30, ATM IV 206.00%, IV rank 57.72%, expected move 59.06%. The iron condor on PSEC below is built from the 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 PSEC specifically: PSEC IV at 206.00% is mid-range versus its 1-year history, so the credit collected on a PSEC iron condor sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 59.06% (roughly $1.36 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 PSEC expiries trade a higher absolute premium for lower per-day decay. Position sizing on PSEC should anchor to the underlying notional of $2.30 per share and to the trader's directional view on PSEC stock.
PSEC iron condor setup
The PSEC 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 PSEC at $2.30 on that close, the first option leg uses a $2.42 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PSEC 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 PSEC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Call | $2.42 | N/A |
| Buy 1 | Call | $2.53 | N/A |
| Sell 1 | Put | $2.18 | N/A |
| Buy 1 | Put | $2.07 | N/A |
PSEC iron condor risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
PSEC iron condor payoff curve
Modeled P&L at expiration across a range of underlying prices for the iron condor on PSEC. 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.
When traders use iron condor on PSEC
Iron condors on PSEC are a delta-neutral premium-collection structure that profits if PSEC stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
PSEC thesis for this iron condor
The market-implied 1-standard-deviation range for PSEC extends from approximately $0.94 on the downside to $3.66 on the upside. A PSEC iron condor is a delta-neutral premium-collection structure that pays off when PSEC 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 PSEC IV rank near 57.72% is mid-range against its 1-year distribution, so the IV signal is neutral; the iron condor thesis on PSEC should anchor more to the directional view and the expected-move geometry. As a Financial Services name, PSEC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PSEC-specific events.
PSEC 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. PSEC positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PSEC alongside the broader basket even when PSEC-specific fundamentals are unchanged. Short-premium structures like a iron condor on PSEC carry tail risk when realized volatility exceeds the implied move; review historical PSEC earnings reactions and macro stress periods before sizing. Always rebuild the position from current PSEC chain quotes before placing a trade.
Frequently asked questions
- What is a iron condor on PSEC?
- A iron condor on PSEC is the iron condor strategy applied to PSEC (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 PSEC stock at $2.30 on the most recent close, the strikes shown on this page are snapped to the nearest listed PSEC chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are PSEC 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 PSEC iron condor priced from the end-of-day chain at a 30-day expiry (ATM IV 206.00%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PSEC iron condor?
- The breakeven for the PSEC iron condor priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 PSEC market-implied 1-standard-deviation expected move in the same options snapshot is approximately 59.06%; 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 PSEC?
- Iron condors on PSEC are a delta-neutral premium-collection structure that profits if PSEC stock stays inside the inner short strikes; short strikes typically sit near 1 standard deviation from spot.
- How does current PSEC implied volatility affect this iron condor?
- PSEC ATM IV is at 206.00% with IV rank near 57.72%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.