Iron Butterfly
In plain English
A tighter, higher-paying iron condor. You sell at-the-money instead of out-of-the-money, so you collect more premium but the profit zone is narrower — you really need the price to pin one level.
How it's built
A short ATM straddle plus protective wings — higher credit, narrower profit zone than a condor.
Illustrative payoff at expiry on a NIFTY-like underlying (spot 24,000, 7d, 13% IV). The shape is the point — open it in the Strategy Lab to tune spot, time and volatility live.
Max profit₹10,632
Max loss₹2,368
Net premiumCr ₹10,632
Breakevens23,836 / 24,164
When to use it
Strong conviction the price pins a level at expiry, high IV.
Max profit
Net credit (price expires at the ATM strike).
Max loss
Limited to (wing width − net credit).
Common mistakes
- Treating it like a condor (it has a much narrower max-profit point).