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Chapter 9. Two Basic Sideways Strategies > Comparison Between the Butterfly and...

Comparison Between the Butterfly and the Condor

  • With a Condor we have a greater target for our maximum return, spanning the two middle strike prices; whereas the Butterfly’s maximum return occurs only if the stock lands on the single middle strike price at expiration.

  • The Condor can incur a greater net debit because, typically, your first leg (with calls) or last leg (with puts) involves buying a Deep In the Money option, which is expensive.

  • Both strategies offer the investor “limited” maximum risk and limited maximum upside. Take note, however, that the maximum risk with these strategies is still 100% of what you spend on them.


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