Neutral Options Strategies
The beauty of options is that you don't need to try and predict future market movement. With the right strategies, you can trade within a neutral range and still profit.
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Iron Butterfly

An iron butterfly is a multi-leg, risk-defined, neutral strategy with limited profit potential. Iron butterflies have no directional bias and capitalize on a decrease in volatility and minimal movement from the underlying stock.
Iron Butterfly
Kirk Du Plessis
Apr 19, 2021

An iron butterfly is a combination of a short straddle and iron condor. It's a great strategy to use during very high IV setups when you also want to reduce the capital required to hold the trade. You'll build this strategy by selling both the ATM call and ATM put strike (similar to a straddle) and then buying further OTM wings for protection (like an iron condor). The key is to use a wider spread in the strike prices to maximize the credit received. For example, if a stock is trading at $50, you would sell the ATM call and put at $50 strike and then look to buy maybe the $45 or $40 puts below the market and the $55 or $60 calls above the market. The wider you can make the strategy, the more credit received and the higher probability of success.

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Unbalanced Iron Condors
Unbalanced iron condors are very similar to balanced iron condors, but can be set up with a slight directional bias. The strategy still profits from decreasing volatility and minimal stock movement.

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