A call spread, which should net you a credit balance after opening the short strike, would obviously allow you to keep the net premium to the extent the trade does not penetrate the short strike at expiry. With a condor, you have two net credit premiums in your pocket, one of which you might have to adjust out in time and up in value in the case of a call bear spread or down value and out in time in the case that the bull spread short strike is penetrated. With both premiums in your pocket, you have more gearing available in order to adjust the trade either up or down and still maintain your profit potential that you set at the open of the condor. With either a call spread or a put spread, you only have the gearing provided by the open net credit on one leg. You can certainly lose that one bet with very little gearing to adjust to a profitable trade. With a condor, you can only lose one leg of the trade and have enough premium at the open of the condor to adjust the leg you lost to guide you to a profitable trade. This is the ultimate non-binary play. You are directionally ambivalent. You are simply betting that whatever happens post earnings, that the stock will remain within a range of possibilities. In order to determine what that range might be, up or down, I always look to what the ask on a strangle pre-earnings announcement around the underlying trading just ahead of earnings. For example, the day of earnings, ROKU was trading right about 133 to 136 during market hours. A strangle at 133/134 was trading on the ask at 15 and change. So I set my condor -15 from market trading (133 to 136) for bull spread, and +15 for the bear spread (133 to 136). Combined wingspan of 30 points. The net credit on both legs was about 1.50 and I went 20 by 20 so net credit was 1.50+1.50 = 3.00 x 2000 or 6000.00 to open the condor. Of course the rest is history as both expired worthless
between my shot strikes. Had I had to make an adjustment either up or down, I had 6k to adjust only one leg as it is technically impossible to lose both legs, right? The stock cannot be in two places at the same time, right? I mean this isn't quantum mechanics or a case of quantum superposition. The price is what it closes at on expiration of a particular option. Anyway, hope this helps and sheds some light on the thesis behind condors to play earnings announcements. One other thing. Since the premiums heading into an announcement are elevated and will soon crater once the unknown becomes a known, you have a little extra juice in your pocket due to the cratering of implied volatility post earnings. And when something is going to go down, you short that volatility like there's no tomorrow. One simple rule that is as immutable as any law of physic, implied volatility comes down after the release of any news.
Live it, learn it, trade it.
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