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211: Iron Butterfly Strategy - 8 Tips Before Your Next Trade

The Option Alpha Podcast

CHAPTER

The Iron Butterfly Pay Off Diagram

The k, the max profit, is generated by selling a call and selling it put near or at the money. You don't always have to do it at the exact same strike price. The way define your risk with iron butterflies is you buy long option contracts on either side of where the stock is trading. Now that's where you get that peak, that high profit point in the iron butterfly pay off diagram.

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