Iron Butterfly

An Iron Butterfly is a neutral, low volatility strategy constructed from a long in-the-money call (red), a short at or near the money put (green), a short at or near the money call (blue), and a long out-of-the-money put (yellow). An Iron Butterfly is a special case of an iron condor where the strikes in the condor’s central short strangle have been collapsed to form the butterfly’s central short straddle.