Iron condors and butterflies combine a credit put spread and a credit call spread and attempt to profit from small or no moves in the stock.

An easy way to think about condors and flies is they are positions that take the other side of those expecting movement in the stock. They “sell the move”.

What is an Iron Condor?

An Iron Condor consists of a credit call spread and credit put spread, sold at the same time as a 4 legged trade. It establishes a profit range between the two credit spreads, with max gain possible if the stock finishes at expiry between the short call and short put:

What is an Iron Butterfly?

An Iron Butterfly has the same components as an Iron Condor, a credit call spread combined with a credit put spread, but the short call and put share the same strike, making the Iron Butterfly a more precise trade than a Condor, with an exact center for Max Gain:

Because the short strikes are a specific point, the max gain of this trade is at that specific point (the center of the green above). The gains are less as the stock moves away from that center point.

On Options AI, selecting the Neutral button on Fast Trade will generate both an Iron Condor and an Iron Butterfly based on the expected move for your time frame. You can also generate Condors using the Range function on Chart Trade.

The widths of the trades can be adjusted on the edit strikes feature as well as re-centering each trade higher or lower if the trader has a discretional view.