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Iron butterfly vs iron condor: which range trade is which?

An iron butterfly sells both short legs at the same strike. An iron condor sells them apart. Same four legs and the same wings, but one pays more and needs the stock to sit almost still.

Comparison · 9-minute read · Updated 2026-10-29

The short answer

Both trades sell a put and a call, then buy a further-out put and call as protection. Four legs, one credit, a loss that stops at a known number.

The only structural difference: an iron butterfly sells both short legs at the same strike, usually right at the stock. An Iron condor sells them at two strikes, one above the stock and one below.

That one change does three things at once. The butterfly collects a bigger credit. Its worst case is smaller. And its profit window shrinks to a fraction of the condor's.

If you have read about straddles and strangles, this will feel familiar. A butterfly is a short straddle with wings bought on it. A condor is a short strangle with wings. Same relationship, now with a floor under the loss.

Side by side

A worked example (hypothetical)

Harbor Tools, a made-up stock, sits at $50. Both trades run 30 days with $5 wings. This is an illustration, not a trade idea.

The iron butterfly. Sell the $50 put and the $50 call. Buy the $45 put and the $55 call. Net credit $2.00, so $200.

The iron condor. Sell the $45 put and the $55 call. Buy the $40 put and the $60 call. Net credit $1.00, so $100.

Max loss is the wing width minus the credit, both times:

• Butterfly: $5 × 100 = $500, minus $200 → −$300.
• Condor: $5 × 100 = $500, minus $100 → −$400.

Break-evens:

• Butterfly: $50 ± $2.00 → $48 and $52.
• Condor: $45 − $1.00 and $55 + $1.00 → $44 and $56.

The part people get backwards

Read that table again, because it does not say what "higher reward, higher risk" would predict.

With equal wings, the butterfly's best case is bigger ($200 against $100) and its worst case is smaller (−$300 against −$400). Both, at once. The bigger credit improves both ends, because max loss is the width minus the credit and the width is the same.

So what do you pay for that? The window.

• Butterfly: profitable between $48 and $52. Four dollars wide.
• Condor: profitable between $44 and $56. Twelve dollars wide.

The arithmetic behind those widths is worth knowing. A butterfly's window is just twice the credit ($2.00 × 2 = $4). A condor's is the gap between its short strikes plus twice the credit ($10 + $2 = $12). Move the shorts apart and you trade credit for room.

There is a second, quieter cost. The butterfly's full $200 arrives only if Harbor Tools finishes at exactly $50. One dollar either way and most of it is gone — look at the $48 and $52 rows, both $0. The condor keeps its entire $100 anywhere from $45 to $55, which is a thing that actually happens.

Managing them is different too

A condor sits out of the money on both sides, so there is usually room to react — roll the tested side, close the untested one, or take the loss early. What to do when an iron condor gets tested walks that through.

A butterfly is at the money from the first minute. One of its short legs is always in trouble, which means the position swings hard with the stock and there is nowhere to roll to. Many sellers close either trade early rather than hold for the last of the credit, and with a butterfly that is less a preference than a necessity.

Both are high-Implied volatility trades: you want the premium rich when you sell and quiet afterwards. Both need the top options permission at most brokers because of the four legs, and Canadian registered accounts (TFSA, RRSP) often won't allow spreads at all — check your broker's list before you plan one.

The iron condor calculator prices the condor version, and the map of strategies past the wheel shows where both sit next to everything else.

Which fits you?

1. "I think this stock is pinned and I want the most credit." Butterfly. Accept that the full credit needs a near-perfect finish.
2. "I think it drifts, and I want room to be wrong." Condor. Smaller credit, a band you can live inside.
3. "I want to be paid without a four-leg trade." Neither — the wheel strategy sells one leg at a time and never has an uncovered side. The wheel against an iron condor compares the capital.
4. "I want the condor's range with a bigger credit." Narrow the short strikes. You are walking the condor toward a butterfly, one dollar at a time — there is no third strategy hiding in between.

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