SOFI iron condor, priced on the real chain

Four legs, one idea: you are selling the market's estimate of how far SOFI can travel. The short strikes ($14.5 / $19) define the range you're renting out; the long wings ($14 / $19.5) cap what a violent move can cost you.

Both spreads cannot lose. SOFI finishes on one side of the market, so at most one vertical goes in the money — which is why max loss is the width of ONE spread minus the credit, $38, not double it. Max profit is the $12 credit, earned by doing nothing.

Breakevens land at $14.38 and $19.12. Outside that band the position loses; between it, it wins. That band is 29.1% wide relative to spot, against 50% implied vol over 27 days.

Return on risk is $12 against $38 — roughly 32% if it works. You need a high hit rate to justify that ratio, which is exactly what the 67% probability is telling you.

The risk shape is a plateau with two cliffs. Anywhere between $14.38 and $19.12 you make money; past the long wings you lose a fixed $38. Between short and long strike the P/L slides linearly — that is where most condors are actually managed, not at expiry.

Assignment risk is real on the short legs, especially the calls near ex-dividend, and especially in the last week. Being assigned on one leg of a four-leg structure leaves you with a stock position and a broken condor over a weekend.

Liquidity is a risk, not a convenience. The moment you most want out of a short-premium position is the moment the spread is widest, and the exit price you modelled at mid will not be available.

The accessibility is genuine and so is the arithmetic problem behind it. At a mid-teens share price, 100 shares is a couple of thousand dollars and the premium is a healthy percentage of that — but it is also a small number of dollars, and commissions and half-cent slippage eat a meaningful share of a fifteen-dollar credit. This is the one name on the list where transaction costs belong in the yield calculation.

SOFI's Aug 28 strikes are $0.5 apart near the money (3.07% of spot). That is a coarse ladder: one rung is a large fraction of the implied move, so precision on the short strike is an illusion. 49k contracts of open interest on Aug 28 is workable around the money and thin in the wings — width costs more here than the ladder suggests. 20 strikes on that expiry — 48% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Adequate at the near strikes, thin beyond them; the bid-ask is a large fraction of the premium at every strike.

Skew is inverted: the 25-delta CALL implies 6.0% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is in contango: the back month implies 2.2% more vol than the front. Calm now, uncertainty later — which rewards selling the front month and makes the back month an expensive thing to own outright.

At 50% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $2.22 over 27 days — roughly −13.6% to +13.6%, or $14.09 to $18.53. Everything the iron condor above collects is rent on that range. If SOFI routinely covers 13.6% in 27 days, the credit is fair compensation rather than edge.

The specific way people lose money on SOFI: Ignoring costs. A $0.02 slip on a $0.15 credit is thirteen percent of the trade, and no delta table shows you that.