Use price, short-strike delta, spread value, time and volatility to choose between holding, closing or adjusting a tested side.
Define tested consistently
Traders may define a side as tested when the underlying touches the short strike, when short-option delta reaches a threshold or when the spread reaches a chosen multiple of its opening credit. Pick the definition before entry.
A touch early in a long-duration trade differs from a touch hours before expiration because gamma and time available for recovery are different.
Reassess the move
Determine whether the move reflects a temporary fluctuation, trend change, scheduled event or volatility shock. Review price structure and the reason the original range was selected.
Do not assume mean reversion merely because the short strike was reached. The option market may be repricing a genuine change in expected movement.
Compare four responses
Holding preserves the original range but accepts current risk. Closing the whole condor ends both sides. Closing only the tested vertical preserves profit on the other side but leaves a one-sided credit spread. Rolling changes strike, time or both.
Calculate the payoff and Greeks for each response. Include bid-ask cost and the possibility that a multi-leg adjustment does not fill at the displayed midpoint.
Control expiration risk
Near expiration, a tested short strike creates concentrated gamma and assignment uncertainty. If the underlying finishes between the vertical's strikes, the account can receive shares from the short leg.
Reduce or close when the account cannot support that resulting exposure or when the remaining reward no longer pays for the risk.
Tested call-side example
A condor's short call has moved from 15 delta to 38 delta with 12 days remaining. The call spread costs three times its opening credit to close while IV has risen. The trader compares a full close, a tested-side roll and a smaller position rather than moving the put side automatically.
Practical checklist
- Apply the predefined tested-side trigger.
- Check trend, event and IV conditions.
- Price full close and one-sided alternatives.
- Stress continuation beyond the long wing.
- Confirm assignment and buying-power outcomes.
Frequently asked questions
Is touching the short strike always a loss?
No. The condor's total result depends on credit, time, volatility and both verticals, but risk has increased.
Should the tested side always be rolled?
No. Closure or size reduction may provide better forward economics.
Why does DTE matter?
Shorter DTE usually leaves less recovery time and can concentrate gamma near the strike.
- Complete iron condor adjustment guide
- Roll the untested side
- Roll to the next expiration
- Convert to an iron butterfly
- Close instead of adjust
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Options involve risk and are not suitable for every investor. This material is educational and is not investment, tax or legal advice. Contract terms, settlement and broker requirements can vary.