Compare the short iron condor and iron butterfly through strike placement, credit, profit range, breakevens and directional tolerance.
Structure
The iron butterfly sells an ATM call and put at the same strike and buys outside wings. The condor sells an OTM put and OTM call at different strikes.
Credit and maximum profit
The butterfly usually collects more credit because its short straddle is closer to the money. The condor generally collects less but can retain maximum profit across a range rather than at one exact strike.
Breakevens
A larger butterfly credit can create meaningful breakevens, yet its P&L changes immediately away from the body strike. Condor short strikes create a flat expiration-profit plateau between them.
Choose by forecast
Use the butterfly when the forecast centers on a specific expiration price and its reward justifies concentration. Use the condor when the thesis is a broader range with smaller maximum credit.
A practical example
With $100 stock, a 95/100/105 iron butterfly targets $100. A 90/95/105/110 iron condor accepts less credit in exchange for a $95–$105 maximum-profit zone.
This simplified example focuses on one position and a limited set of price and volatility outcomes. Live option prices also reflect the underlying price, time decay, rates, dividends, liquidity and transaction costs. Greeks are theoretical estimates, not guarantees.
Frequently asked questions
Which has a wider profit plateau?
The iron condor.
Which often receives more credit?
The iron butterfly.
Are both defined-risk?
Yes, when their long wings are maintained.
Continue the Short Iron Condor cluster
Explore related guides: Short Iron Condor Greeks: Delta, Gamma, Theta and Vega · When to Close a Short Iron Condor · Short Iron Condor Example With Full Payoff Scenarios. For a structured sequence, use the free Level 11 – Short Iron Condor course.
Next strategy: Continue with the Butterfly Spread guide and the free Level 12 course.
Options involve risk and are not suitable for every investor. This material is educational and is not investment, tax or legal advice. Greeks are theoretical estimates, and contract terms and broker requirements can vary.