A butterfly with calls and puts

Do we need to know how to do long/short butteflies with calls and puts (calls and puts in the same butterfly)

Until now I’ve only seen butterfly spreads done with either calls or puts but I just stumbled on some call/put butterfly when doing a schweser exam.

I think we do not need to know about that for the exam.

The curriculum does not cover iron butterflies (calls and puts in the same butterfly). It would not be fair to put questions about that in the real exam. I suspect previous versions of the curriculum covered iron butterflies, and that’s why Schewer included questions about them, but forgot/missed to update its mock exams in line with 2019 curriculum.

It wouldnt be uncommon for CFA to throw in a curve ball.

A failed bull spread or failed bear spread can easily be converted into an iron butterfly to save money. They could ask Mgr A built a bull call spread and the market moved against him, he wanted to salvage the loses using a put.

Make sure you know the Harambe spread too.

(not serious, there is no such spread. But never forget).

is iron condor even in the curriculum?

There are no condors of any sort in the CFA curriculum.

Not iron, not aluminum, not molybdenum, not tantalum, not bismuth, not cadmium.


There’s no need for it to be an iron butterfly, however.

A failed bull call spread could be (partially) rescued with a bear call spread, and vice versa. A failed bull put spread could be (partially) rescued with a bear put spread, and vice versa.

Except when there are …

Fixed Income Yield Curve Strategies, Reading 24.

Long live the iron condor, most profitable options strategy out to exist!

Stop spreading lies. The most profitable (fail safe) way to make money in this game is by going Long vol when VIX is in backwardation, and short when it’s in contango.

Even my third grad nephew knows that.


Adamantium options or GTFO!!! :stuck_out_tongue:

Iron Bear