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Published On: Thu, Apr 4th, 2013

Iron Butterfly

An iron butterfly is an advanced trading strategy that is created by buying a lower strike out-of-the-money put, selling a middle strike at-the-money put, selling a middle strike at-the-money call, and buying a higher strike out-of-the-money call.

Similar to an Iron Condor, the Iron Butterfly is a limited risk strategy that has a higher probability of a small profit with an underlying asset with low volatility.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

 

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