Condor - Page 161 and exhibit 32

CFA Level III Fixed Income
#1

I’m not following this graph of the condor. Condor is like a butterfly spread with an elongated body.

They are saying that this is profiting on the short end if it steepens and profits if the long end flattens. I’m not following the logic. From this elongated body (I see this entire elongated body as being short) and then I see the two long wings. A regular butterfly which has 3 points would profit from flattening.

I would think both ends would profit here from flattening.

Completely confused. ANybody. Much appreciated.

#2

Or is it that they just need to add curvature to profit with on the short end and long end (Doesn’t matter if it flattens or steepens)?

I’m very confused – If anybody has anything on this, I’m very appreciative. It’s on the bottom of Page 161 and then they have a graph of a condor on page 162.