The condor's tighter, higher-conviction cousin. Sell an ATM call and ATM put right at the money, buy OTM wings for protection. Bigger credit, but the stock needs to stay much closer to your center strike.
Iron Butterfly is a sideways / range-bound options trading strategy (4 legs) engineered for limited risk profiles in high iv market environments.
Net Credit Received
Wing Width - Net Credit Received
ATM Strike +/- Net Credit
| Action | Contract Type | Strike Selection | Quantity |
|---|---|---|---|
| BUY | PUT | OTM Put Wing | 1x |
| SELL | PUT | ATM Put | 1x |
| SELL | CALL | ATM Call | 1x |
| BUY | CALL | OTM Call Wing | 1x |
The bread-and-butter income trade for a range-bound market. Stack a Bear Call Spread on top of a Bull Put Spread, collect the combined credit, and let the stock chop sideways while theta pays you.
🔁 Sideways / Range-BoundAs pure as premium-selling gets — sell an ATM call and an ATM put, same strike, same expiry. Maximum premium collected, but maximum exposure too if the stock decides to move hard in either direction.
🔁 Sideways / Range-BoundThe straddle's more forgiving sibling. Sell an OTM call and an OTM put instead of ATM options — less premium collected, but a much wider range where you stay profitable.
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