Sometimes, it's not possible to trade a single stock or commodity. So, what do you do? You create an options strategy with multiple contracts! That's exactly why one of the most common options trades is an Iron Butterfly. By using four different contracts as part of your strategy, you can benefit from stock or commodity prices moving within a defined range. And when volatility is low, that's when the trade becomes profitable.Is there a way to make money while preserving your capital? Of course, you can! Just take a look at the Iron Butterfly. This option trade strategy is intended to profit from stocks and futures prices that fluctuate within a defined range. Furthermore, it also works in tandem with implied volatility to generate extra income.With Iron Butterfly on your side, you can be confident that your portfolio will always be protected by smart trading strategies.This options trading strategy uses four different contracts to profit from stocks or futures prices that move within a defined range. In addition, it uses an iron butterfly as its foundation, which refers to a trade in which a series of vertical spreads is used to target the same price point while protecting against downside risk by means of buying puts and selling calls at the same strike price.Iron butterfly trades provide tremendous flexibility and return potential, since they allow traders to take advantage of different market conditions and capitalize on short-term volatility. Plus, they are very easy to construct and implement – all you need is a basic understanding of options trading and some practical experience.
