Butterfly Spread

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The butterfly strategy is one of the most robust and versatile option selling techniques available.
In a lazy, quiet market condition there is very little - if anything - to do to manage these [...]

photo credit: Anne Toal
The Iron Butterfly Spread is actually an Iron Condor. Even when in my option trading software platform - when selecting from their ‘trading strategies’ to place - when wanting to select an Iron Butterfly - it’s not one of their options. You must select ‘Iron Condor’ instead.
However, the payoff diagram of [...]

photo credit: centralasian
I’ve spent a ton of money on various option trading course over the years. Some good - some bad - but what I’ve found surprising is how almost ALL of them deliver only text book type information on ‘what is an option’ or ‘what is a butterfly spread’ or ‘what do the [...]

photo credit: divemasterking2000
A great way for spread traders to get ‘hands on’ experience trading butterfly spreads, credit spreads, and iron condors - without being exposed to the risk - is to ‘paper trade’ them first.
Any option trading strategy - or any trading strategy for that matter - can act quite differently than one might [...]

When you look at a butterfly spread trade’s risk graph you will notice on either side of the graph (this is the triangular graph - the graph that looks like a tepee) the point at which the expiration line crosses through the 0 break even line.
On some software - like the ThinkorSwim.com option trading software [...]