In late December 2025, social media exploded with studies of catastrophic buying and selling losses involving zero-DTE iron condors on SPX.
Based on posts on YouTube, MarketWatch, and numerous buying and selling boards, a buying and selling group led by a person often called “Captain Condor” allegedly skilled important losses on December twenty fourth – some social media estimates prompt losses within the tens of tens of millions of {dollars}.
Whereas the precise particulars stay disputed and we can not independently confirm all claims, the incident sparked necessary discussions a couple of harmful buying and selling apply often called martingaling – doubling your place dimension after every loss in an try to get better.
Whether or not or not the reported technique was really used on this case, the idea serves as a important lesson: martingaling is likely one of the quickest methods to destroy an choices buying and selling account, no matter how good your underlying technique is.
This isn’t about assigning blame to any particular person or group.
That is about understanding what martingaling is, why it’s so harmful, and the way to make sure you by no means unintentionally fall into this entice – as a result of the maths behind it will possibly wipe out accounts and life financial savings sooner than most merchants notice.
Contents
What Occurred In December 2025?
Based on broadly circulated studies on social media and buying and selling boards, a big buying and selling loss occurred on December 24, 2025 – the shortened buying and selling day earlier than Christmas.
What was reportedly concerned:
Zero-DTE (or near-zero-DTE) iron condors on SPX
A buying and selling methodology that had allegedly been worthwhile for years
December twenty fourth noticed SPX shut at an all-time excessive of 6,932
Social media posts from merchants describing “catastrophic monetary losses”
Some posts talked about GoFundMe pages to assist with dwelling bills
Unverified estimates on social media prompt group losses of $30-50 million
The important thing element:
For a single day’s loss to trigger account wipeouts, the place sizes will need to have been terribly massive – far past normal threat administration parameters.
Choices circulate knowledge from analytical software program (like SpotGamma) confirmed unusually massive SPX positions constructing through the pre-Christmas interval when buying and selling quantity is often decrease
Nevertheless, such software program can not definitively determine who positioned particular orders.
Why this issues for training:
No matter who was concerned or what precisely occurred, the incident illustrates a important lesson: when place sizes develop too massive by way of martingaling or every other methodology, a single opposed transfer can destroy accounts.
The technique used (zero-DTE iron condors) isn’t inherently harmful. What’s harmful is violating place sizing guidelines.
Let’s perceive precisely what martingaling is and why it’s so harmful.
Pattern Iron Condor Buying and selling Plan
What Is The Martingale Technique?
The martingale technique is a betting system the place you double your guess after each loss to get better earlier losses and obtain a revenue.
The Primary Idea:
Commerce 1: Danger 1 unit, lose 1 unitTrade 2: Danger 2 items (double), lose 2 items (complete loss: 3 items)Commerce 3: Danger 4 items (double once more), WIN 4 unitsResult: +4 items received – 3 items misplaced = +1 unit revenue
You’ve recovered all earlier losses plus gained your unique revenue goal.
The promise:
Finally you’ll have a profitable commerce, and once you do, you’ll get better every part you misplaced plus make your unique revenue.
The truth:
This works completely… till it doesn’t. And when it doesn’t, it destroys accounts.
Why Martingaling Appears Logical
On the floor, martingaling seems to be a “can’t lose” technique:
The Math Appears to Work:
Should you’re buying and selling a technique with a 70% win price (typical for iron condors), dropping 3-4-5 occasions in a row appears unlikely. So doubling down after every loss means you’ll ultimately hit a winner that recovers every part.
The Psychological Attraction:
After a loss, doubling your dimension makes you’re feeling such as you’re “taking management” and “being aggressive to get better.” It feels proactive somewhat than passive.
Historic Success:
Merchants who use martingaling typically expertise years of success. Each dropping streak ultimately ends with a winner, reinforcing the assumption that “it all the time works ultimately.”
The Gambler’s Fallacy:
After 5 losses in a row, it looks like “a winner is due.” This makes doubling down appear much more logical – you’re betting massive once you’re “almost certainly” to win.
The issue:
Each single one in all these seemingly logical causes is fallacious.
Obtain: Iron Condor Buying and selling Plan
Why Martingaling Doesn’t Work In Buying and selling
The martingale technique would work completely if and provided that:
You had limitless capital (you could possibly all the time double once more)
There have been no guess limits (you could possibly place any dimension commerce)
The sport may proceed indefinitely (no account blowup)
In buying and selling, all three circumstances fail:
Restricted Capital:
Your account dimension is finite. By commerce 6-8, you actually can not place the required dimension – you’ve run out of shopping for energy.
Place Measurement Limits:
Brokers have place limits. You may’t promote 1,000 iron condor contracts when you solely have $50,000 in your account – margin necessities stop it.
Psychological Breaking Level:
Even when you had the capital, risking $64,000 on a single commerce after dropping $63,000 requires metal nerves that almost all people don’t possess.
The Monte Carlo Lesson
Probably the most well-known instance of martingaling’s failure occurred on August 18, 1913 on the Monte Carlo On line casino.
The roulette wheel landed on black 26 occasions in a row.
Gamblers stored betting on pink, doubling their bets every time, satisfied that “pink was due.” They misplaced tens of millions.
I misplaced round $500 (quite a bit for me on the time) once I was 18 and first went to a on line casino doing an analogous technique, so I do know all too properly the problems with martingale.
The chance of 26 blacks in a row: 0.00000149%
Impossibly uncommon? Sure.
Inconceivable? No.
And when that 0.00000149% occasion occurred, everybody martingaling was worn out.
The parallel to buying and selling:
December 24, 2025 might have been that “26 blacks in a row” second for merchants utilizing martingaling on zero-DTE condors. SPX rallied to all-time highs on shortened vacation buying and selling with massive establishments gone.
Unlikely? Sure. Inconceivable? No.
And when you’re martingaling, you don’t have to survive the possible – it is advisable survive the inconceivable. As a result of the inconceivable will ultimately occur.
Conclusion
Casinos are good; they’ve a restrict on guess dimension for a motive.
Merchants should be good, too; they should have a restrict on place dimension for every commerce.
The most commerce dimension for every particular person commerce ought to be 5% of the account dimension or much less.
Martigalling isn’t good.
When one follows unsafe practices, complete accounts and life financial savings may be worn out, as this cautionary story has proven.
When one learns correct rules, buying and selling choices may be protected. Iron condors may be protected. And 0-DTE may be protected.
Continuously Requested Questions
The place did the time period martingale come from?
The French phrase “jeu à la martingale” means a reckless betting type.
Then, in some way, the on line casino homes began utilizing the time period “martingale” to explain methods by which gamers hold rising their bets after losses.
As such, a martingale isn’t primarily based on an individual’s title.
Therefore, the phrase shouldn’t be capitalized (until within the context of beginning a sentence).
Is rising threat fallacious?
No, there are official causes for rising threat in a commerce.
{Many professional} merchants do it correctly when scaling up or adjusting a dropping commerce.
Scaling up and martingaling aren’t the identical factor.
As you scale up, you have got a set “deliberate capital” allotted to a commerce and start with a smaller portion of it.
You might enhance the place a couple of times at most, both as a result of the setup improves or to boost potential returns, however you by no means exceed your predetermined most dimension.
Martingaling ignores this constraint; it entails repeatedly doubling down after losses, hoping that the subsequent commerce will get better every part.
How do we all know Captain Condor is martingalling?
We can not definitively verify the precise methods utilized by any explicit dealer or group.
The knowledge comes from social media studies, information protection, and publicly out there choices circulate knowledge displaying massive SPX positions throughout that interval.
Software program like SpotGamma can detect massive positions however can not verify who positioned them or their actual technique.
This text makes use of the reported incident as a case research for academic functions in regards to the risks of martingaling and place sizing violations.
Q: Are zero-DTE iron condors too dangerous for retail merchants?
Zero-DTE iron condors aren’t inherently too dangerous – they’re a defined-risk technique with identified most loss.
The danger comes from place sizing, not the technique itself.
A dealer promoting 1-2 contracts with correct threat administration can commerce zero-DTE safely.
A dealer promoting 50-100 contracts violates place sizing guidelines whatever the technique used.
The issue is rarely the technique – it’s all the time place sizing and threat administration.
Need to Be taught Correct Danger Administration?
Understanding place sizing and threat administration is the inspiration of sustainable choices buying and selling.
In order for you systematic approaches to managing positions with out martingaling:
Choices Earnings Mastery: Be taught correct place sizing, threat administration, and systematic buying and selling approaches for revenue methods ($397)
The Accelerator Program: Superior coaching protecting portfolio-level threat administration, place sizing frameworks, and systematic revenue methods ($997)
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Disclaimer: The knowledge above is for academic functions solely and shouldn’t be handled as funding recommendation. The technique offered wouldn’t be appropriate for traders who aren’t acquainted with change traded choices. Any readers on this technique ought to do their very own analysis and search recommendation from a licensed monetary adviser.
