LONG IRON BUTTERFLY
#pixarts.trade , #safebull
Market View – A significant move up or down The Trade – Buy a put and call at the same strike near the stock price. Your view is that the stock will go down or up. Sell a lower put and a higher call on both sides for reducing premium Premium – Pay Margin – […]
Market View – A significant move up or down
The Trade – Buy a put and call at the same strike near the stock price. Your view is that the stock will go down or up. Sell a lower put and a higher call on both sides for reducing premium
Premium – Pay
Margin – Required
When To Do
- When the stock is going to move big in one direction
- Avoid buying high IV
Pros
- Lower premium than straddle
- Low Vega risk and theta risk
Cons
- Low probability of success
Time and Volatility
- Loses time value every day
- Gains slightly if IV goes up
Max Loss : Net Premium
Max Profit : High strike – middle strike – net premium received