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Strategic Subtleties: Butterflies and Iron Condors

From Theory To Practice

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Today, we continue with our mini-series on Strategic Subtleties. So far, we’ve covered Short Puts versus Put Ratio Spreads and Strangles versus Straddles. In this segment, we compare a Butterfly versus an Iron Condor. While the Straddle/Strangle discussion was a way to play a neutral bias with undefined-risk, the Butterfly/Iron Condor gives us two ways to play that same neutral bias with defined-risk. James, the host of Resize & Analyze, joins the set today, and he makes an excellent point about Butterflies and Iron Flies effectively being synthetic versions of one another.

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