Add training workflow, datasets, and runbook
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Condors and Butterflies
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The “wing spread” family is a set of option strategies that is very popular,
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particularly among experienced traders. These strategies make it possible
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for speculators to accomplish something they could not possibly do by just
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trading stocks: They provide a means to profit from a truly neutral market
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in a security. Stocks that don’t move one iota can earn profits month after
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month for income-generating traders who trade these strategies.
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These types of spreads have a lot of moving parts and can be intimidating
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to newcomers. At their heart, though, they are rather straightforward break-
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even analysis trades that require little complex math to maintain. A simple
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at-expiration diagram reveals in black and white the range in which the
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underlying stock must remain in order to have a profitable position.
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However, applying the greeks and some of the mathematics discussed in
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previous chapters can help a trader understand these strategies on a deeper
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level and maximize the chance of success. This chapter will discuss condors
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and butterflies and how to put them into action most effectively.
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