Short Iron Butterfly Calculator

Search a symbol to visualize the potential profit and loss for a short iron butterfly option strategy.

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What is a short iron butterfly?

High VolatilityLimited ProfitLimited Loss

The opposite of a long iron butterfly. This strategy is a net debit and unlike the long butterfly, it doesn't offer a very risk/reward ratio. If the stock moves in either direction you can net a small profit.

If volatility increases, your chance of profit will increase as well. Time is harmful when the position is unprofitable, but helpful once it becomes profitable.

ABCProfitLossStock Price (at expiration)
  • Sell a put at strike A
  • Buy a put at strike B
  • Buy a call at strike B
  • Sell a call at strike C