Which is better Iron Butterfly or iron condor?

As you can see from the payoff diagrams above, iron condors have a wider profit zone than the iron butterfly. However, the iron butterfly has a higher profit potential than the iron condor. Because the iron butterfly sells ATM options, it has higher vega exposure than the iron condor. What strategy is better?

What is an Iron Butterfly?

An iron butterfly is an options strategy where you sell a call and a put option at the same strike price while buying a call and a put option at different, further-out strike prices. This setup is designed to profit when the price of the underlying asset stays within a narrow range, offering limited risk and reward.

What is the difference between a butterfly spread and an Iron Butterfly?

Iron Butterfly In this TradeHacker Video Lesson, we’ll talk about the difference between a Butterfly Spread and an Iron Butterfly. They’re essentially the exact same trade when it comes to looking at a risk profile and your risk verses reward, but there are a few little nuances that we want you to understand. Watch our video below for full details!