When we believe the stock price will remain stable, we can trade Iron Butterfly options to profit from the passage of time.

The trade will be profitable as long as the stock price fluctuates less than expected.

Today, we share what an Iron Butterfly is, and how to find the best Iron Butterfly entry points.

We'll talk about 5 key points today:
0:52 What is an Iron Butterfly?
1:43 What is the difference between Iron Butterfly and Straddle?
2:21 When to trade Iron Butterflies?
3:42 Best Options Scanner filter settings for Iron Butterflies
4:50 The best Iron Butterfly entry points right now

An Iron Butterfly is a neutral options strategy made up of a short Straddle and a long Strangle.

The contracts define a profitable range, and we can be profitable as long as the stock price stays between the breakeven prices before expiration.

Then the 4 contracts will depreciate and the options seller will profit from the Iron Butterfly.

Both the Iron Butterfly and the short Straddle are neutral options strategies, but the Iron Butterfly has a defined maximum loss to help us manage risks easier.

When selling Iron Butterflies, we want both theta and vega to depreciate the options prices, so we can sell high price Iron Butterflies to open, and buy low price Iron Butterflies to close.

Now you know how to use the Options Scanner to filter the best Iron Butterfly entry points.

Remember to use the scanner often to find high-return neutral trades to sell, and profit from the lack of price movement.

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