Iron Butterfly vs Iron Condor: Where the Profit Range Changes

A fictional iron butterfly collects $300 and an iron condor collects $150. If the shares finish at $100, the butterfly earns twice as much. At $95, the butterfly loses $200 while the condor earns its full $150. The larger credit answers only part of the comparison.

A short iron butterfly puts its short call and short put at the same strike. A credit iron condor separates those short strikes. That changes the shape of their expiration profit: a peak at one price for the butterfly, a plateau between two prices for the condor. Neither structure is universally better. Compare the credit, the prices that produce a profit, the maximum loss and the account obligations together.

The short strikes determine the centre

The Options Industry Council describes a short iron butterfly with a short call and put at one middle strike, protected by a lower long put and an upper long call. Its wings are equally distant from the middle, and all four options share an expiration.

For a credit iron condor, the short put sits below the short call. A long put sits farther below and a long call farther above. This article compares equal-width put and call spreads, with one contract per leg and the same expiration throughout. OMP’s iron-condor guide explains the basic construction.

At the butterfly’s middle strike, every leg has zero intrinsic value. Move away from that price and one short option acquires intrinsic value, reducing profit until its long wing offsets further movement. The condor’s separated short strikes leave a central interval where all four legs have zero intrinsic value. Its full opening credit remains as gross expiration profit throughout that interval.

Hold each spread width at $5

Assume fictional Cedar shares trade at $100. The examples use unadjusted, physically delivered American-style equity options with a 100-share multiplier. Every figure below is an assumption or author arithmetic, rather than a live quote, forecast or recommended trade.

Each put spread and call spread is $5 wide. The outer strikes differ between the two positions because the condor’s short strikes are farther apart. Holding the same outer strikes instead would change the spread widths and produce a different comparison.

These are assumed net credits for complete four-leg sets; no individual-leg execution prices are implied. The calculations value every leg at the same expiration share price and assume the position remains intact. They exclude commissions, fees, bid-ask costs, taxes, financing, dividends and stock positions arising from exercise or assignment.

At $98, the butterfly’s short $100 put has $200 of intrinsic liability. Its other legs have none, so the $300 credit leaves $100 profit. At that same price, none of the condor’s legs has intrinsic value, leaving $150 profit.

Below $95, the butterfly’s put spread reaches its full $500 intrinsic liability. The $300 credit offsets part of that amount, leaving $200 loss. The condor’s put spread reaches its full liability at $90, where its smaller credit leaves $350 loss. These are economic expiration values, not promised cash-settlement payments from equity options.

Maximum profit and any profit cover different ranges

The butterfly earns its maximum $300 only at $100. It makes a positive gross profit between $97 and $103, with zero profit at those endpoints. Its credit supplies $3 of room on either side of the common short strike.

The condor earns its maximum $150 from $95 through $105 in the intrinsic-value calculation. It makes a positive gross profit between $93.50 and $106.50. Its lower breakeven is the short put strike minus the credit; its upper breakeven is the short call strike plus the credit.

The condor therefore has a wider profitable range in this example, despite receiving less premium. The butterfly earns more between $98.50 and $101.50, and the two earn the same $150 at those endpoints. Outside that central interval, the condor initially does better, but beyond the outer tails it loses more. Neither payoff dominates the other at every share price.

For either equal-width structure here, maximum gross expiration loss is the $5 spread width minus the credit, multiplied by 100. The butterfly risks $200 and the condor risks $350. A claim that the condor is safer because it has a wider profit range would miss that larger possible loss. A claim that the butterfly is better because it collects more would miss how quickly its profit falls away from $100.

A range also supplies no probability on its own. These examples contain no price-distribution estimate, expected return or evidence about which structure will win more often. Actual credits change the breakevens and losses. OMP’s credit-versus-debit butterfly comparison addresses a different question about opening cash flow; its condor-versus-strangle example shows what adding protective wings changes.

Four legs still need an assignment plan

An expiration table cannot quote today’s exit. Liquidity and the bid-ask spread across four legs can change the amount available when closing, and transaction costs reduce the figures shown. Different tax treatment or financing costs can also alter the comparison. Neither opening credit is presented as spendable income or a return on the broker’s required capital.

FINRA’s assignment guidance explains that an American-style short option can be assigned before expiration. A short equity put can require buying shares; a short equity call can require delivering them. Owning a protective option does not automatically fulfil the assigned obligation. Separate action on the remaining position may be necessary.

Near a butterfly’s common short strike, or either condor short strike, uncertain exercise can leave an unexpected share position. Subsequent stock movements, financing needs or a separately closed leg can take the account outside the intact-position loss calculation. Contract deliverables, exercise deadlines, broker liquidation practices and available funding need their own checks.

Before comparing either strategy’s credit, mark its maximum-profit prices, both breakevens and both loss boundaries. Then check whether the account can handle assignment and an actual four-leg exit before those expiration values apply.

Sources and method

Primary sources checked 9 November 2026, Australia/Brisbane: OIC’s short iron butterfly and short condor, plus FINRA’s assignment explanation. Cedar, the credits and every numerical result are fictional assumptions or independently reproduced arithmetic. The comparison covers equal-width, intact positions at expiration and makes no suitability or probability claim.

Disclosure: Options Matrix Pro makes options-analysis software. General education, not financial advice. See our disclaimer.