Been reading about these two strategies but getting confused about the main differences.
Both seem to involve selling options in the middle and buying protection on the sides. The profit diagrams look similar too.
What makes one better than the other? When would you pick iron condor over iron butterfly?
Condors give more flexibility than butterflies. They suit my trading style.
Iron butterfly uses same strike for short options. Iron condor spreads strikes with OTM puts and calls. Condor offers wider profit zone but lower premium. Butterfly has higher premium but tighter profit window.
Butterflies require high precision - you need the stock to reach that exact strike price. If it moves off target, you could lose money quickly. Condors offer much more flexibility. You give up some premium, but they handle price fluctuations better. From experience, condors are more forgiving, especially in volatile markets. That is why I prefer condors for consistent gains.
Choosing between these strategies depends on your market outlook.
Butterflies rely on precise pricing and can be risky if the stock does not land exactly where predicted.
Condors provide a wider profit zone, which can be more forgiving in unpredictable markets.
Many traders prefer condors for that reason, as they offer better flexibility.
Lost $800 learning this the hard way last month.
Butterfly centers everything at one strike - I use it when I know exactly where price will land.
Condor gives you breathing room with two middle strikes. Better for sideways movement when you can’t nail the exact spot.
Condors work better for me since I suck at pinpoint predictions.