Close Navigation
Learn more about IBKR accounts

Iron Butterfly

Trading Term

An options strategy with limited risk and limited profit potential that involves both a long (or short) straddle, and a short (or long) strangle. An iron butterfly contains four options; it is equivalent to a regular butterfly spread that contains only three options. For example, a short iron butterfly might include:

  • Buy 1 XYZ May 60 call and 1 May 60 put
  • Write 1 XYZ May 65 call and 1 XYZ May 55 put

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.