Iron butterfly (options strategy)
Type of advanced stock options trading strategy / From Wikipedia, the free encyclopedia
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In finance an iron butterfly, also known as the ironfly, is the name of an advanced, neutral-outlook, options trading strategy that involves buying and holding four different options at three different strike prices. It is a limited-risk, limited-profit trading strategy that is structured for a larger probability of earning smaller limited profit when the underlying stock is perceived to have a low volatility.
It is known as an iron butterfly because it replicates the characteristics of a butterfly with a different combination of options (compare iron condor).[1]