# Iron Condor vs Iron Butterfly: Which to Sell Source: https://theoptionsbench.com/iron-condor-vs-iron-butterfly/ > Plain-text mirror for AI/LLM ingestion. Canonical HTML page: https://theoptionsbench.com/iron-condor-vs-iron-butterfly/ --- Updated 2 September 2026 ยท by Theo Chen They are the same idea with one knob turned. Both are four-leg, defined-risk, market-neutral credit trades that profit when a stock goes nowhere. The difference is whether you spread your two short strikes apart (the condor) or stack them on one body strike (the butterfly) - and that single choice trades a wide, forgiving profit zone against a much larger credit. Here is how to decide which to sell. ## The short verdict Sell the **iron condor** when you just expect the stock to stay in a range - it gives a wide profit zone and a higher probability of profit for a smaller credit. Sell the **iron butterfly** when you have a real conviction the stock will pin a specific level - it pays a much larger credit, but the profit zone is narrow and you need precision. Condor = forgiving and likely; butterfly = precise and lucrative. ## Side by side | | Iron Condor | Iron Butterfly | | Short strikes | Two, spread apart (OTM put + OTM call) | One shared body strike (ATM) | | Credit received | Smaller | Much larger | | Profit zone | Wide plateau between the shorts | Narrow peak at the body | | Max profit when | Price stays between the short strikes | Price pins the body exactly | | Probability of profit | Higher | Lower | | Max loss | Wider spread - credit (defined) | Wider wing - credit (defined) | | Best when | You expect range-bound drift | You expect a pin at one level | | Bottom line | Pick if you want a wider zone and higher win rate | Pick if you expect a pin and want the larger credit | ## Worked example: a $100 stock, same outer wings **Iron condor:** buy the $90 put, sell the $95 put, sell the $105 call, buy the $110 call for a **$2.30 credit**. You keep all $230 anywhere between $95 and $105, and risk $270. **Iron butterfly:** keep the same $90 and $110 wings but collapse both short strikes onto $100 - the at-the-money straddle - for a **$6.30 credit**. Nearly three times the premium, $370 at risk, and the full $630 only if the stock finishes exactly at $100. Iron condor at expiration Buy the $90 put, sell the $95 put, sell the $105 call, buy the $110 call for a $2.30 credit. A $230 plateau ten dollars wide, breakevens at $92.70 and $107.30, $270 at risk. Iron butterfly at expiration Same $90 and $110 wings, both shorts collapsed onto $100, for a $6.30 credit. A $630 peak at one price, breakevens at $93.70 and $106.30, $370 at risk. One knob, two shapes. The condor's breakeven range is wider - $92.70 to $107.30 against the butterfly's $93.70 to $106.30 - but not by as much as the pictures suggest. The real difference is the top: the condor is flat across its whole $95-to-$105 plateau, so anywhere in there pays the same $230, while the butterfly pays its $630 at exactly one price and hands it back on the way out. You are choosing a table-top against a spike, not a big zone against a small one. ## The iron condor: wide and forgiving An iron condor is a bull put spread below the price and a bear call spread above it, sold together for one net credit. Because the two short strikes are spread apart, the stock can wander anywhere between them and you still keep the full credit. That wide plateau is what makes the condor the higher-probability trade - you are betting on a range, not a point. The price is a smaller credit and therefore a smaller maximum profit relative to the capital at risk. Strengths - Wide profit zone, higher probability of profit - Forgiving if the stock drifts - Defined, knowable max loss Trade-offs - Smaller credit and max profit - Four legs to open and manage - A trending move can still breach a side Model an iron condor -> ## The iron butterfly: precise and lucrative An iron butterfly sells the at-the-money call and put at one body strike - an at-the-money short straddle - wrapped in protective wings. Selling the straddle collects a large credit, but you only keep all of it if the stock finishes right at the body. Move away from that strike and the profit gives back quickly. The butterfly is a higher-conviction trade: you are paid more for being right about _where_ the stock lands, not just that it stays calm. Strengths - Much larger credit and max profit - Best risk-reward if the stock pins the body - Defined, knowable max loss Trade-offs - Narrow profit zone, lower probability - Needs the stock to settle near one level - Profit decays fast as price moves off the body Model an iron butterfly -> ## Who should sell which - Sell an iron condor if: you expect the stock to stay range-bound, you want a higher win rate, and you are happy with a smaller credit for the safety of a wide zone. - Sell an iron butterfly if: you have a strong view the stock will settle near a specific strike, and you want the largest credit available for a defined-risk trade. - Either way: size the wings to the expected move and only sell premium when the IV rank is high enough to be worth it. The bottom line Sell the Iron Condor when you simply expect the stock to stay in a range - it is forgiving, with a wide profit zone and a higher probability of profit for a smaller credit; sell the Iron Butterfly instead only when you have real conviction the stock pins one exact level, since it pays a much larger credit for a narrow zone that demands precision. ## Frequently asked questions What is the main difference between an iron condor and an iron butterfly? Both are four-leg, defined-risk, market-neutral credit trades. The iron condor sells two different inner strikes - a put below the price and a call above - leaving a wide profit plateau between them. The iron butterfly collapses those short strikes onto a single body strike, for a much larger credit but a narrow zone. The condor forgives drift; the butterfly pays more if the stock pins your strike. Which one collects more premium? The iron butterfly. Because it sells at-the-money options (the short straddle at the body), its credit is much larger than the condor, whose short strikes sit out-of-the-money. But that bigger credit comes with a narrower profit zone, so you keep the full amount only if the stock finishes very close to the body. Which has a higher probability of profit? Usually the iron condor. Its profit zone is wide - anywhere between the two short strikes - so the stock has more room to wander and still leave you a winner. The iron butterfly needs the stock to settle near one specific strike, which is less likely, so it trades a higher payout for a lower hit rate. Is the max loss the same? They are calculated the same way: the wider wing width minus the net credit, times 100 per contract. At expiration the stock can only finish in one tail, so only one side can ever be breached. Both are fully defined-risk - you know your worst case before you open. When should I trade a butterfly instead of a condor? Trade the iron butterfly when you have a genuine conviction that the stock will settle near a specific level by expiration - a magnet strike, a pin from heavy open interest, or a post-event drift to fair value. Trade the iron condor when you simply expect the stock to stay in a range without a strong view on exactly where it lands.