Profit Loss Graph for Butterfly’s and Condors

Butterflies and Condors are one of my favorite strategies because they have so many variations and configurations.

Butterflies and Condors can both be thought of as a long spread and a short spread. The difference between a  Butterfly and a Condor is that a Condor will have some strikes in between the 2 spreads. Combine

a long spread 

and

a short spread 

and you get either a Butterfly:

or a condor:

The strategy and configuration for different butterflies deserve their own page or even section, for now an analysis of the graph shows that they are designed to profit in a specified region. This region is commonly known as the tent, since it resembles a camping tent. Once outside the tent the losses will start to accumulate and time is against you as the pink line will drop closer to the blue line as time goes on.

 

Bob Bullock

Contributing Writer