are considered long spreads. And credit condors or butterflies are
considered short spreads.
The words long and short mean little, though in terms of the spread as a
whole. The important thing is which strikes have long options and which
have short options. A call debit spread is synthetically equal to a put credit
spread on the same security, with the same expiration month and strike
prices. That means a long condor is synthetically equal to a short iron
condor, and a long butterfly is synthetically equal to a short iron butterfly,
when the same strikes are used. Whichever position is constructed, the best-
case scenario is to have debit spreads expire with both options in-the-money
(ITM) and credit spreads expire with both options out-of-the-money
(OTM).
Many retail traders prefer trading these spreads for the purpose of
generating income. In this case, a trader would sell the guts, or middle
strikes, and buy the wings, or outer strikes. When a trader is short the guts,
low realized volatility is usually the objective. For long butterflies and short
iron butterflies, the stock needs to be right at the middle strike for the
maximum payout. For long condors and short iron condors, the stock needs
to be between the short strikes at expiration for maximum payout. In both
instances, the wings are bought to limit potential losses of the otherwise
naked options.