Iron Butterfly Strategy
NeutralAdvanced4-Leg Spread
Sell ATM straddle with protective wings for maximum premium in neutral markets.
How It Works
1
Sell ATM Straddle: Sell call and put at the same middle strike price.
2
Buy Protection: Buy OTM call above and OTM put below for protection.
3
Profit Zone: Maximum profit if stock pins at middle strike at expiration.
Key Metrics
Max Profit:Net Credit Received
Max Loss:Strike Width - Net Credit
Upper Breakeven:Middle Strike + Net Credit
Lower Breakeven:Middle Strike - Net Credit
Best Case:Stock at middle strike