{"id":8372,"date":"2022-07-17T14:30:05","date_gmt":"2022-07-17T06:30:05","guid":{"rendered":"https:\/\/slashtraders.com\/?p=8372"},"modified":"2025-09-29T17:41:54","modified_gmt":"2025-09-29T09:41:54","slug":"best-iron-butterfly-options","status":"publish","type":"post","link":"https:\/\/www.slashtraders.com\/en\/blog\/best-iron-butterfly-options\/","title":{"rendered":"Top Stock Screener Filters for Iron Butterfly Options (Pro Guide)"},"content":{"rendered":"<p class=\"wp-block-paragraph translation-block\">When we believe the stock price will remain stable, we can trade Iron Butterfly <a href=\"https:\/\/slashtraders.com\/en\/blog\/what-are-options\/\" target=\"_blank\" rel=\"noreferrer noopener\">options<\/a> to profit from the passage of time. The trade will be profitable as long as the stock price fluctuates less than expected.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Today, we share what an Iron Butterfly is, and how to find the best Iron Butterfly entry points.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<span class=\"mWKqegJ4jzYOVEIGnl8Awo5ih6sDtduXZbxH30f\"><iframe title=\"Full Guide to Safe and High Return Iron Butterfly Options\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/ua4DfCNXgaU?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/span>\n<\/div><\/figure>\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u73fe\u5728\u6700\u4f73\u7684strangle\u9078\u64c7\u6b0a\u9032\u5834\u6a5f\u6703\">What Is an Iron Butterfly?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">An Iron Butterfly, or Options Butterfly, is a neutral options strategy made up of a short Straddle and a long Strangle. The contracts define a profitable range, and we can be profitable as long as the stock price stays between the breakeven prices before expiration. Then the 4 contracts will depreciate and the options seller will profit from the Iron Butterfly.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">If we believe the stock price will not <a href=\"https:\/\/slashtraders.com\/en\/blog\/market-volatility-hv-iv\/\" target=\"_blank\" rel=\"noreferrer noopener\">move a lot in the near future<\/a>, we can sell an Iron Butterfly that expires next month:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sell a Straddle at the market price that expires next month to define the maximum premium we can receive.<\/li>\n\n\n\n<li>Buy a Strangle that expires next month near the breakeven prices to limit our maximum losses.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/07\/sell-atvi-iron-butterfly.png\" alt=\"sell atvi iron butterfly options\" class=\"wp-image-8376\" srcset=\"\" sizes=\"(max-width: 1024px) 100vw, 1024px\" data-srcset=\"\" \/><figcaption class=\"wp-element-caption\">Combine a short Straddle and a long Strangle to create an Iron Butterfly.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The Iron Butterfly will be profitable if the stock price does not move beyond the breakeven prices before expiration.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u73fe\u5728\u6700\u4f73\u7684strangle\u9078\u64c7\u6b0a\u9032\u5834\u6a5f\u6703\">What Is the Difference Between Iron Butterfly and Straddle?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">Both the Iron Butterfly and the <a href=\"https:\/\/slashtraders.com\/en\/blog\/best-short-straddle-options-strategy\/\" target=\"_blank\" rel=\"noreferrer noopener\">short Straddle<\/a> are neutral options strategies, but the Iron Butterfly has a defined maximum loss to help us manage risks easier.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here is the profit analysis of a short Straddle that expires next month. The short Straddle has a greater maximum profit and also a wider profitable range than Iron Butterfly. But if the stock price fluctuates more than expected, the maximum loss of a short Straddle is infinite.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/07\/sell-atvi-straddle-1.png\" alt=\"sell atvi straddle\" class=\"wp-image-8379\" srcset=\"\" sizes=\"(max-width: 1024px) 100vw, 1024px\" data-srcset=\"\" \/><figcaption class=\"wp-element-caption\">A short Straddle has a higher maximum profit, a wider profitable range, but the maximum loss is infinite.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">So the buying power required and the risk to trade a short Straddle is much more than an Iron Butterfly.<\/p>\n\n\n\n<table id=\"tablepress-42\" class=\"tablepress tablepress-id-42\">\n<thead>\n<tr class=\"row-1\">\n\t<th class=\"column-1\">Strategy<\/th><th class=\"column-2\">Buying power<\/th><th class=\"column-3\">Maximum profit<\/th><th class=\"column-4\">Maximum loss<\/th><th class=\"column-5\">Probability of profit<\/th><th class=\"column-6\">Return on capital<\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\">Iron Butterfly<\/td><td class=\"column-2\">$222<\/td><td class=\"column-3\">$278<\/td><td class=\"column-4\">$222<\/td><td class=\"column-5\">40%<\/td><td class=\"column-6\">125%<\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td class=\"column-1\">Short Straddle<\/td><td class=\"column-2\">$1,546<\/td><td class=\"column-3\">$390<\/td><td class=\"column-4\">Unlimited<\/td><td class=\"column-5\">54%<\/td><td class=\"column-6\">25%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<!-- #tablepress-42 from cache -->\n\n\n\n<p class=\"wp-block-paragraph translation-block\">The <a href=\"https:\/\/slashtraders.com\/en\/blog\/iron-condor-vs-iron-butterfly\/\" target=\"_blank\" rel=\"noreferrer noopener\">Iron Butterfly has limited losses<\/a> and uses less buying power. It makes it easier to manage risks.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u73fe\u5728\u6700\u4f73\u7684strangle\u9078\u64c7\u6b0a\u9032\u5834\u6a5f\u6703\">When to Trade Iron Butterflies?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">When selling Iron Butterflies, we want both <a href=\"https:\/\/slashtraders.com\/en\/blog\/option-greeks\/\" target=\"_blank\" rel=\"noreferrer noopener\">theta and vega<\/a> to depreciate the options prices, so we can sell high price Iron Butterflies to open, and buy low price Iron Butterflies to close.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Theta is the changes to options value with respect to changes in time.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">From our experience, selling options with more than 30 days to expiration have a predictable time value decay.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/04\/theta-decay.png\" alt=\"theta decay\" class=\"wp-image-7604\" srcset=\"\" sizes=\"(max-width: 1024px) 100vw, 1024px\" data-srcset=\"\" \/><figcaption class=\"wp-element-caption\">Theta decay increases when the options is close to expiration.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">So we can be patient and earn a profit as time passes.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Vega is the changes to options value with respect to changes in IV.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">Since we want to sell high and buy low, we need to sell to open at high IV, then <a href=\"https:\/\/slashtraders.com\/en\/blog\/buy-to-open-vs-buy-to-close\/\" target=\"_blank\" rel=\"noreferrer noopener\">buy to close<\/a> when vega causes the option's value to decay at low IV.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">Gamma is the changes to delta with respect to changes in stock price. It is also the acceleration to options prices with respect to changes in stock price.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">Gamma grows when the options are close to expiration, leading to big fluctuations in <a href=\"https:\/\/slashtraders.com\/en\/blog\/options-value\/\" target=\"_blank\" rel=\"noreferrer noopener\">options value<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">So whether our Iron Butterfly is profitable or not, we prefer to close the trade or <a href=\"https:\/\/slashtraders.com\/en\/blog\/roll-options\/\" target=\"_blank\" rel=\"noreferrer noopener\">roll it to the next month<\/a> before 14 days to expiration, to reduce gamma risks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We also need to find underlying opportunities less prone to large fluctuations. We can do that by picking stocks with a high market capitalisation to reduce the risk of manipulation.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full\"><a href=\"https:\/\/www.slashtraders.com\/en\/pricing\/?utm_source=blog&amp;utm_medium=banner\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"971\" height=\"120\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/03\/slashtraders-trial-banner.png\" alt=\"slashtraders trial banner\" class=\"wp-image-7387\" srcset=\"\" sizes=\"(max-width: 971px) 100vw, 971px\" data-srcset=\"\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u73fe\u5728\u6700\u4f73\u7684strangle\u9078\u64c7\u6b0a\u9032\u5834\u6a5f\u6703\">Best Options Scanner Filter Settings for Iron Butterflies<\/h2>\n\n\n\n<p class=\"wp-block-paragraph translation-block\"><a href=\"https:\/\/slashtraders.com\/en\/tools\/options-scanner\/\" target=\"_blank\" rel=\"noreferrer noopener\">Options Scanner<\/a> is designed to find high probability and high return short neutral options in seconds. Here are some tips for using the filter function to find the best Iron Butterfly entry points.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>We want to choose opportunities with greater than 30 DTE to get the safest theta decay and less gamma.<\/li>\n\n\n\n<li class=\"translation-block\">We can filter <a href=\"https:\/\/slashtraders.com\/en\/blog\/iv-rank-vs-iv-percentile\/\" target=\"_blank\" rel=\"noreferrer noopener\">IV Perc<\/a> &gt;67% to find opportunities that have a high chance of contracting IV and vega in our favour.<\/li>\n\n\n\n<li>By choosing Market Cap larger than $10 billion, we avoid choosing stocks that can get manipulated and explode.<\/li>\n\n\n\n<li>We should also avoid underlying that have an upcoming Earnings Date in 30 days to reduce the chance of large fluctuations.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"239\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/07\/options-scanner-iron-butterfly-filter-settings.png\" alt=\"options scanner iron butterfly filter settings\" class=\"wp-image-8390\" srcset=\"\" sizes=\"(max-width: 1024px) 100vw, 1024px\" data-srcset=\"\" \/><figcaption class=\"wp-element-caption\">Options Scanner's filter function lets us find safer and high-return Iron Butterfly opportunities.<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u73fe\u5728\u6700\u4f73\u7684strangle\u9078\u64c7\u6b0a\u9032\u5834\u6a5f\u6703\">The Best Iron Butterfly Entry Points Right Now<\/h2>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">Since Iron Butterflies and Iron Condors are both defined risk, neutral options, we sort the <a href=\"https:\/\/slashtraders.com\/en\/blog\/best-iron-condor-options\/\" target=\"_blank\" rel=\"noreferrer noopener\">Iron Condor<\/a> ROC by descending order to get ideas for high-return Iron Butterfly trades.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"513\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/07\/options-scanner-results-1024x513.png\" alt=\"options scanner results\" class=\"wp-image-8393\" srcset=\"https:\/\/www.slashtraders.com\/wp-content\/uploads\/2022\/07\/options-scanner-results-1024x513.png 1024w, https:\/\/www.slashtraders.com\/wp-content\/uploads\/2022\/07\/options-scanner-results-300x150.png 300w, https:\/\/www.slashtraders.com\/wp-content\/uploads\/2022\/07\/options-scanner-results-768x385.png 768w, https:\/\/www.slashtraders.com\/wp-content\/uploads\/2022\/07\/options-scanner-results-18x9.png 18w, https:\/\/www.slashtraders.com\/wp-content\/uploads\/2022\/07\/options-scanner-results.png 1249w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">NKE has the safest and highest return Iron Condor right now.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The list shows NKE has one of the safest and high return Iron Condor opportunities. So let's check out the profit analysis of a Nike Iron Butterfly.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An NKE Iron Butterfly that expires next month has a maximum income of $640. The maximum loss of $360 is also the buying power required for the trade.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/07\/sell-nke-iron-butterfly.png\" alt=\"sell nke iron butterfly\" class=\"wp-image-8396\" srcset=\"\" sizes=\"(max-width: 1024px) 100vw, 1024px\" data-srcset=\"\" \/><figcaption class=\"wp-element-caption\">The profit analysis of an NKE Iron Butterfly that expires next month.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">If the stock price remains between $100 and $110 after 35 days, the trade has a maximum return of 177%.<\/p>\n\n\n\n<p class=\"has-ast-global-color-4-background-color has-background wp-block-paragraph\"><a href=\"https:\/\/www.slashtraders.com\/en\/blog\/slashtraders-vs-sp500\/\" target=\"_blank\" rel=\"noreferrer noopener\">SlashTraders vs S&amp;P 500: 450% Outperformance, Verified Trades and How to Copy Every Alert<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>We can trade Iron Butterfly options to profit from a stable price trend. We share what an Iron Butterfly is, and how to find the best Iron Butterfly entry points.<\/p>","protected":false},"author":1,"featured_media":8373,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"plain-container","ast-site-content-layout":"normal-width-container","site-content-style":"unboxed","site-sidebar-style":"unboxed","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":"","_wp_rev_ctl_limit":"5"},"categories":[3],"tags":[56,12,64,54,14,11],"class_list":["post-8372","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-cn","tag-en","tag-es","tag-nke","tag-options","tag-tw"],"_links":{"self":[{"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/8372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/comments?post=8372"}],"version-history":[{"count":5,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/8372\/revisions"}],"predecessor-version":[{"id":13938,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/8372\/revisions\/13938"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/media\/8373"}],"wp:attachment":[{"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/media?parent=8372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/categories?post=8372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.slashtraders.com\/en\/wp-json\/wp\/v2\/tags?post=8372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}