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 varied buying and selling boards, a buying and selling group led by a person often known as “Captain Condor” allegedly skilled vital losses on December twenty fourth – some social media estimates instructed losses within the tens of thousands and thousands of {dollars}.
Whereas the particular particulars stay disputed and we can’t independently confirm all claims, the incident sparked necessary discussions a few harmful buying and selling apply often known as martingaling – doubling your place dimension after every loss in an try to get well.
Whether or not or not the reported technique was really used on this case, the idea serves as a essential lesson: martingaling is without doubt 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 by chance fall into this lure – as a result of the maths behind it will probably wipe out accounts and life financial savings sooner than most merchants understand.
Contents
What Occurred In December 2025?
Based on broadly circulated studies on social media and buying and selling boards, a major 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 instructed 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 giant – far past customary danger administration parameters.
Choices move information from analytical software program (like SpotGamma) confirmed unusually giant SPX positions constructing through the pre-Christmas interval when buying and selling quantity is usually decrease
Nevertheless, such software program can’t definitively determine who positioned particular orders.
Why this issues for training:
No matter who was concerned or what precisely occurred, the incident illustrates a essential lesson: when place sizes develop too giant by means of martingaling or some other technique, a single hostile transfer can destroy accounts.
The technique used (zero-DTE iron condors) shouldn’t be 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 wager after each loss to get well earlier losses and obtain a revenue.
The Fundamental Idea:
Commerce 1: Threat 1 unit, lose 1 unitTrade 2: Threat 2 models (double), lose 2 models (whole loss: 3 models)Commerce 3: Threat 4 models (double once more), WIN 4 unitsResult: +4 models received – 3 models misplaced = +1 unit revenue
You’ve recovered all earlier losses plus gained your unique revenue goal.
The promise:
Finally you’ll have a successful commerce, and while you do, you’ll get well every thing 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:
For those who’re buying and selling a method with a 70% win fee (typical for iron condors), shedding 3-4-5 instances in a row appears unlikely. So doubling down after every loss means you’ll finally hit a winner that recovers every thing.
The Psychological Enchantment:
After a loss, doubling your dimension makes you’re feeling such as you’re “taking management” and “being aggressive to get well.” It feels proactive quite than passive.
Historic Success:
Merchants who use martingaling usually expertise years of success. Each shedding streak finally ends with a winner, reinforcing the idea that “it all the time works finally.”
The Gambler’s Fallacy:
After 5 losses in a row, it seems like “a winner is due.” This makes doubling down appear much more logical – you’re betting huge while you’re “probably” to win.
The issue:
Each single certainly one of these seemingly logical causes is flawed.
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 would all the time double once more)
There have been no wager limits (you would place any dimension commerce)
The sport might 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’t place the required dimension – you’ve run out of shopping for energy.
Place Dimension Limits:
Brokers have place limits. You possibly can’t promote 1,000 iron condor contracts in case you solely have $50,000 in your account – margin necessities stop it.
Psychological Breaking Level:
Even in case you had the capital, risking $64,000 on a single commerce after shedding $63,000 requires metal nerves that the majority 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 instances in a row.
Gamblers stored betting on purple, doubling their bets every time, satisfied that “purple was due.” They misplaced thousands and thousands.
I misplaced round $500 (loads for me on the time) once I was 18 and first went to a on line casino doing the same technique, so I do know all too properly the problems with martingale.
The likelihood of 26 blacks in a row: 0.00000149%
Impossibly uncommon? Sure.
Unimaginable? No.
And when that 0.00000149% occasion occurred, everybody martingaling was worn out.
The parallel to buying and selling:
December 24, 2025 could 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 huge establishments gone.
Unlikely? Sure. Unimaginable? No.
And in case you’re martingaling, you don’t have to survive the possible – you could survive the unbelievable. As a result of the unbelievable will finally occur.
Conclusion
Casinos are good; they’ve a restrict on wager dimension for a cause.
Merchants must be good, too; they should have a restrict on place dimension for every commerce.
The most commerce dimension for every particular person commerce must be 5% of the account dimension or much less.
Martigalling shouldn’t be good.
When one follows unsafe practices, complete accounts and life financial savings might be worn out, as this cautionary story has proven.
When one learns correct rules, buying and selling choices might be secure. Iron condors might be secure. And 0-DTE might be secure.
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 growing their bets after losses.
As such, a martingale shouldn’t be based mostly on an individual’s identify.
Therefore, the phrase shouldn’t be capitalized (until within the context of beginning a sentence).
Is growing danger flawed?
No, there are official causes for growing danger in a commerce.
{Many professional} merchants do it correctly when scaling up or adjusting a shedding commerce.
Scaling up and martingaling are usually not the identical factor.
As you scale up, you’ve gotten a hard and fast “deliberate capital” allotted to a commerce and start with a smaller portion of it.
It’s possible you’ll 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 following commerce will get well every thing.
How do we all know Captain Condor is martingalling?
We can’t definitively verify the particular methods utilized by any explicit dealer or group.
The knowledge comes from social media studies, information protection, and publicly out there choices move information exhibiting giant SPX positions throughout that interval.
Software program like SpotGamma can detect giant positions however can’t verify who positioned them or their precise technique.
This text makes use of the reported incident as a case research for instructional 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 are usually not 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 danger administration can commerce zero-DTE safely.
A dealer promoting 50-100 contracts violates place sizing guidelines whatever the technique used.
The issue isn’t the technique – it’s all the time place sizing and danger administration.
Wish to Be taught Correct Threat Administration?
Understanding place sizing and danger administration is the muse of sustainable choices buying and selling.
If you would like systematic approaches to managing positions with out martingaling:
Choices Revenue Mastery: Be taught correct place sizing, danger administration, and systematic buying and selling approaches for earnings methods ($397)
The Accelerator Program: Superior coaching protecting portfolio-level danger administration, place sizing frameworks, and systematic earnings methods ($997)
Associated Articles
We hope you loved this text on the alleged Captain Condor blow up.
If in case you have any questions, please ship an e-mail or depart a remark beneath.
Commerce secure!
Disclaimer: The knowledge above is for instructional functions solely and shouldn’t be handled as funding recommendation. The technique introduced wouldn’t be appropriate for buyers who are usually not conversant in trade traded choices. Any readers on this technique ought to do their very own analysis and search recommendation from a licensed monetary adviser.
