Modidor

See: Iron Condor.

It might sound like something our of a Tolkien novel, but “modidor” is not the name of a fictional realm in Middle Earth. It’s actually a combination of the word “modified” and the term “iron condor,” and it refers to a type of options spread where we can realize a profit as long as the stock price in question stays above or below (depending on whether our puts and calls are feeling bearish or bullish) a single specified breakeven price. (An iron condor will yield profits as long as the price stays between two strike prices.)

A modidor approach takes a little of the risk out of the equation, though we still have to have enough market savvy to predict the movement of a stock price relative to our chosen strike price.