Why an Iron Butterfly is the same as a Put or Call Butterfly

In this lesson we'll analyze an Iron Butterfly, a Put Butterfly and a Call Butterfly on the thinkorswim platform and we'll see how all of them are synthetically equivalent positions.

-------------------------------------

Sign up to my new course: "Advanced Options Trading in plain English" on Udemy.

Take advantage of a special introductory price and start learning advanced options trading concepts and techniques in clear and simple terms.

Also, don't forget to test your progress as you complete the course by taking the related quiz after each section

[ronlobo]

Unless you trade European style cash settled options, one scenario why one might prefer an iron butterfly with calls or puts over the iron condor equivalent might be to avoid early assignment when the short strikes are placed for a directional bias, e.g. bearish bias with puts only and bullish bias with calls only.