Iron Butterfly

Similar to a put or call butterfly, an iron butterfly is established as a net credit instead. It consists of a bull put spread and a bear call spread combined.


Short Iron Butterfly


Strategy Involves simultaneously selling a put option and a call option at one strike price, buying a put option and a call option at a higher strike price, and selling a put option and a call option at an even higher strike price. All of the options have the same expiration date and are typically used in a neutral market outlook. The strategy is designed to profit from a narrow trading range in the underlying security.
The trader profits from the strategy if the price of the underlying security remains within a certain price range at expiration. If the price of the security is outside of this range, the trader will experience a loss.


Leg 2 plus the net credit received
Leg 2 minus the net credit received


Stock price to be exactly at Leg 2

Max profit:

Limited to the net credit received

Max loss:

Limited to Leg 2 minus Leg 1, minus the net credit received

To Top

Get the
UpLeg App!

Unleash the full potential of your options strategies with our powerful options trading mobile app. Download it now and start making smarter investment decisions on the go


Subscribe to our Newsletter

© UPLEG LLC. All rights reserved.