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An iron butterfly recreates the payoff diagram of a butterfly, but with a combination of two calls and two puts. The option strategy where the middle options (the body) have different strike prices is known as a Condor .
The trader will then receive the net credit of entering the trade when the options all expire worthless. [2] A short iron butterfly option strategy consists of the following options: Long one out-of-the-money put: strike price of X − a; Short one at-the-money put: strike price of X; Short one at-the-money call: strike price of X
A condor is also known as a "stretched butterfly", as its maximum profit is reached on a wider range of underlying prices compared to a butterfly. [6] Both butterflies and condors are known as "wingspreads". [1] The condor is so named because of its payoff diagram's perceived resemblance to a large bird such as a condor. [6]
Payoffs from buying a butterfly spread Payoffs from selling a straddle Payoffs from a covered call. Combining any of the four basic kinds of option trades (possibly with different exercise prices and maturities) and the two basic kinds of stock trades (long and short) allows a variety of options strategies. Simple strategies usually combine ...
Long butterfly spreads use four option contracts with the same expiration but three different strike prices to create a range of prices the strategy can profit from. [ 1 ] [ 2 ] Straddle - an options strategy in which the investor holds a position in both a call and put with the same strike price and expiration date, paying both premiums (long ...
To qualify for either option, you need a good credit score of at least 670 and a debt-to-income ratio below 50%. Dig deeper: What is a debt consolidation loan — and how can it help you lower ...
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OIC companies aren’t alike: some are better, or worse, than others. These companies often don’t take tax cases if the taxpayer owes less than $10,000.