Options
Iron Butterfly 101: Setup, Profit Zones & Risks, Automation + Live Trade Example
Date: 2025-08-11 16:43:29
https://optionalpha.com?ytref=76 – In this video, I share a beginner’s guide to the iron butterfly options strategy — one of my favorite ways to collect premium when I expect the market to stay in a tight range. I’ll walk you through exactly how to set up an iron butterfly trade, how I think about the profit zones, and the risks compared to traditional iron condor strategies. I’ll also show you how I use automation tools to quickly find iron butterfly setups and manage trades using automation.
To tie it all together, I’ll walk through a live iron butterfly trade I entered today in XSP so you can see my full process from start to finish. Whether you’re brand new to iron butterflies or want a quick refresher on new ways to find trade ideas, I hope you’ll find this a clear, practical walkthrough.
=== More Resources & Links ===
Start your 30-day FREE TRIAL to Option Alpha by clicking here: https://optionalpha.com/start?ytref=76
Go from beginner to pro with Option Alpha with 17 quick video lessons inside our new “Fast Track” series: https://optionalpha.com/fast-track?ytref=76
Trading with a smaller account? I created a 55-minute guide on how I would start with a $3,000 portfolio for free here: https://youtu.be/9EMGp7JxHeQ
FREE iron butterfly strategy guide: https://optionalpha.com/strategies/iron-butterfly?ytref=76
Find trade ideas for iron butterflies: https://app.optionalpha.com/tradeideas?credit=1&neutral=1&etfs=1&pop=55-100&sort=mpodds%2Casc?ytref=76
Backtested iron butterfly 0DTE trades: https://app.optionalpha.com/zdte/backtester/toptests?strategy=ironbutterfly?ytref=76
8 tips before your next iron butterfly trade: https://optionalpha.com/podcast/8-iron-butterfly-strategy-tips?ytref=76
Iron condors vs. iron butterfly: what’s the difference? https://optionalpha.com/learn/iron-condor-vs-iron-butterfly?ytref=76
Calculating break-evens on iron butterflies: https://optionalpha.com/podcast/iron-condor-iron-butterfly-break-even-calculations?ytref=76
How to setup a broken-wing iron butterfly: https://optionalpha.com/blog/how-to-set-up-a-broken-wing-butterfly-option-strategy?ytref=76
Automated 1DTE iron butterfly strategy: https://www.youtube.com/watch?v=MlLwmeRXGPc
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As always, this is my opinion and thoughts on how you can use iron butterflies as part of your own trading strategy. If you found this video helpful in any way, please let me know in the comments!
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This video is for educational purposes only and is not a recommendation for buying/selling any security. Options trading is risky, so please read our full risk disclosure here: https://optionalpha.com/legal/risk-disclosure-agreement
