You opened a textbook iron condor, and now the stock is moving toward one of your short strikes. This is the moment that separates profitable iron condor traders from everyone else. Here are five adjustment techniques, when to use each, and real examples.

When Is an Iron Condor "Tested"?

An iron condor is tested when the stock approaches one of your short strikes. Specifically:

  • Approaching: Stock is within 1% of a short strike
  • Tested: Stock has reached the short strike
  • Breached: Stock has moved past the short strike into the spread

    • Your adjustment strategy should differ based on where you are in this spectrum and how much time remains.

    Adjustment #1: Close the Untested Side

    When: Early in the trade (>15 DTE) and the stock moves decisively toward one side.

    How: Buy back the untested (winning) spread for a small amount, reducing your total cost basis.

    Example: You have an iron condor on QQQ ($470):

  • Put spread: $450/$445 — collected $1.20
  • Call spread: $490/$495 — collected $1.10
  • Total credit: $2.30

    • QQQ drops to $456. The call spread is now worth $0.15. Buy it back for $0.15, reducing your cost basis on the remaining put spread to $2.15. Now your put spread has a much wider breakeven at $450 - $2.15 = $447.85 instead of the original $447.70. More importantly, you've removed the upside risk entirely.

    Adjustment #2: Roll the Tested Side

    When: The stock has reached your short strike with 10+ DTE remaining.

    How: Close the tested spread and reopen it at further-out strikes, either in the same expiration or the next one.

    Example: Your short $450 put is tested with 20 DTE. Close the $450/$445 put spread (currently worth $3.20, so a $2.00 loss on that side). Open a new $445/$440 put spread for $1.50 credit. Net debit for the roll: $1.70. This gives your position more room but adds to your total risk.

    Caution: Rolling down/up is not free. You're taking a realized loss and opening a new position. Only roll if the move looks like it's stabilizing, not if it's accelerating.

    Adjustment #3: Roll Out in Time

    When: The stock is near your short strike with less than 10 DTE and you believe the stock will revert.

    How: Close the entire iron condor and open a new one in the next expiration cycle.

    This works because the new expiration gives you:

  • More time for the stock to recover
  • Additional credit from the new position
  • Reset theta decay curve from the beginning

    • Adjustment #4: Add a Debit Spread (the "Hedge")

    When: You're getting tested but don't want to close the position yet.

    How: Buy a debit spread in the direction the stock is moving, partially hedging the tested side.

    Example: QQQ is dropping toward your $450 short put. Buy a $455/$450 put debit spread for $2.00. If QQQ continues falling, this debit spread gains value, offsetting losses on your iron condor's put side.

    This turns your position into a butterfly-like structure on the tested side. The cost is the debit spent on the hedge.

    Adjustment #5: Simply Close (the Underrated Option)

    When: The stock has breached your short strike, or the loss exceeds 1.5-2× your original credit.

    How: Close the entire position and walk away.

    This is the adjustment most traders are reluctant to make, but it's often the right one. Taking a $300 loss now prevents a $500 loss later. The math is simple: if closing at 2× credit, you need roughly 3 winners to offset 1 loser. With a 75% win rate, that's sustainable.

    Decision Framework

    | Situation | DTE | Adjustment | Stock approaching short strike>20Close untested side Stock at short strike10-20Roll tested side out/further Stock at short strike<10Roll to next expiration or close Stock past short strikeAnyClose at 2× credit max | Slow drift toward strike | Any | Add debit spread hedge |

    The Key Mindset Shift

    New traders think adjustments "save" a losing trade. Experienced traders know adjustments manage risk — they transform one position into another, each with its own risk/reward profile. Sometimes the best adjustment is no adjustment at all, and sometimes it's closing for a loss.

    OptionsPilot can alert you when your short strikes reach certain delta thresholds, giving you time to assess and adjust before the position becomes unmanageable.