Iron Butterfly
Imagine you know price will sit in a range for a while — before news, squeezed between the GEX walls, or a liquidity grab before a breakout (everyone has their own read). To earn the most while the market stands still, you open this construction with the profit peak right at the current price.
How the Iron Butterfly works
Max profit is if price closes exactly at the center strike. The credit is larger than an Iron Condor, but the profit zone is narrower. The wings cap the loss.
Placing strikes at GEX levels
Put the center strike at Max Pain or the Gamma Flip — where price often gravitates into expiry; the wings at the Call Wall and Put Wall. The ideal regime is positive GEX and low realized volatility.
Max Pain, the Gamma Flip and the walls are computed live in the GEX Terminal — build the butterfly in the Position Builder.
When to open, the Greeks and managing the position
Best on a sleepy, trendless market when the asset sits right at the target strike and inflated IV should fall. Versus the condor the profit zone is narrower and the win rate lower, but the premium (credit) is much larger. Breakevens = central strike ± credit.
Greeks: strong positive theta at the centre and negative vega. Management: peak profit is exactly at the central strike, so the position is actively rolled/re-centred as price moves.
FAQ
The short call and put sit on the same (center) strike — a bigger credit but a narrower profit zone.
If price closes at the center strike at expiry.
Build the Iron Butterfly on live BTC and ETH quotes in the Position Builder.
Open the Position BuilderRelated strategies
Information is for educational purposes only and does not constitute investment advice. Options trading carries high risk.