Iron Condor vs Iron Butterfly: Break-Evens

An iron condor and an iron butterfly are the same four-leg options trade with one strike moved. Each one sells two options and buys two further-out options as protection. Both pay while the stock stays inside a range. The butterfly sells both of its options at the same strike: a larger credit over a narrower profit zone. The condor pulls those two sold strikes apart and takes a smaller credit for a wider zone.

Iron condor vs iron butterfly: one strike apart

Both positions are a put spread and a call spread on the same stock and the same expiration date. A short option, one you sell, pays you premium up front. A long option, one you buy, costs premium and caps how bad the position can get. Selling both spreads brings money in on day one, and that money is the credit.

Take a stock trading at $100 with an expiration 30 days out. The iron butterfly uses four legs:

• Buy the 95 put
• Sell the 100 put
• Sell the 100 call
• Buy the 105 call

The iron condor keeps the same 5-point wings and separates the two sold strikes:

• Buy the 90 put
• Sell the 95 put
• Sell the 105 call
• Buy the 110 call

That is the entire difference. The butterfly's sold options share one strike at the money, where premium is thickest. The condor's sold options sit 5 points out on each side, where premium is thinner. Everything else matches: the 5-point wings and the expiration date.

How to calculate the break-evens

A break-even is the price at which the position finishes expiration flat, no profit and no loss. Both structures have one on each side, and both are plain offsets from a sold strike.

For the iron butterfly, both break-evens hang off the shared short strike:

• Lower break-even is the short strike minus the credit
• Upper break-even is the short strike plus the credit

For the iron condor, each sold strike carries its own:

• Lower break-even is the short put strike minus the credit
• Upper break-even is the short call strike plus the credit

Suppose the butterfly above opens for a $2.60 credit and the condor for $1.30, both quoted per share, with one contract covering 100 shares. Those are round example numbers, not quotes from any chain. The butterfly breaks even at $97.40 and $102.60, a profit zone $5.20 wide. The condor breaks even at $93.70 and $106.30, a zone $12.60 wide. The butterfly collected twice the premium over a zone less than half the size.

Max loss follows one rule for both: wing width minus credit. The butterfly risks $5.00 minus $2.60, which is $240 per contract, against $260 of maximum profit. The condor risks $5.00 minus $1.30, which is $370 per contract, against $130. The wider zone costs more per contract on the days the stock leaves it. One further asymmetry sits inside the zone itself. The butterfly reaches its maximum only if the stock finishes exactly at $100, while the condor keeps the full credit anywhere between $95 and $105.

Is the profit zone wider than the expected move?

Break-even levels on their own do not settle which structure fits a given chart. The test that does is profit-zone width against the expected move, the size of the move already priced into the options over the same holding period. Our expected move from implied volatility guide walks through the arithmetic: the annual implied volatility figure scaled by the square root of the fraction of a year held.

SELECT
    underlying_symbol                                                       AS symbol,
    round(avg(toFloat64(implied_volatility)) * 100, 1)                      AS atm_iv_pct,
    round(avg(toFloat64(implied_volatility)) * sqrt(30.0 / 365.0) * 100, 2) AS expected_move_30d_pct
FROM global_markets.options_greeks
WHERE underlying_symbol IN ('SPY', 'KO', 'AAPL', 'MSFT', 'NVDA', 'AMD')
  AND date BETWEEN '2026-05-01' AND '2026-05-29'
  AND iv_converged = 1
  AND volume > 0
  AND days_to_expiry BETWEEN 20 AND 45
  AND abs(toFloat64(strike_price) / toFloat64(underlying_close) - 1) < 0.05
GROUP BY symbol
HAVING count() > 50
ORDER BY expected_move_30d_pct DESC

Across May 2026 these chains priced 30-day moves of 4.43% of spot at the quiet end, on SPY, running up to 19.65% on AMD. Same structure, very different room to work with.

Now run the test on the worked example. A 5% expected move on a $100 stock spans $95 to $105, a range $10 wide. The butterfly's $5.20 zone covers 0.52 of that range. The condor's $12.60 zone covers 1.26 of it. Same stock, same wings, and only one of the two stays profitable across the move the chain is already pricing. A butterfly pays in full on a tape quieter than that pricing, and it pays roughly twice as much on the days it lands.

Why the butterfly's credit is bigger

Option premium is not flat across strikes. It peaks at the money and falls away on both sides, and the shape of that fall is the whole credit story.

SELECT
    concat(if(off_pct > 0, '+', ''), toString(off_pct), '%') AS strike_vs_spot,
    round(avgIf(px, leg = 'call'), 2)                        AS call_price,
    round(avgIf(px, leg = 'put'), 2)                         AS put_price
FROM
(
    SELECT
        toInt32(round((toFloat64(strike_price) / toFloat64(underlying_close) - 1) * 100)) AS off_pct,
        if(lower(toString(option_type)) LIKE 'c%', 'call', 'put')                         AS leg,
        toFloat64(option_close)                                                           AS px
    FROM global_markets.options_greeks
    WHERE underlying_symbol = 'SPY'
      AND date BETWEEN '2026-05-01' AND '2026-05-29'
      AND days_to_expiry BETWEEN 25 AND 35
      AND volume > 0
      AND (lower(toString(option_type)) LIKE 'c%' OR lower(toString(option_type)) LIKE 'p%')
)
GROUP BY off_pct
HAVING off_pct BETWEEN -6 AND 6
   AND countIf(leg = 'call') > 0
   AND countIf(leg = 'put') > 0
ORDER BY off_pct

Averaged over the month, a SPY call 30 days out and struck at the money closed at $13.55. The call struck +6% from spot closed at $0.72, and the put struck -6% from spot closed at $2.74. The panel draws a tent. Everything the butterfly sells sits at the peak, and everything the condor sells sits down the slope. The credit gap in the worked example is that shape, measured in dollars. For the layout of the chain those prices come from, see how to read an option chain.

Which one carries more volatility risk?

Vega measures how much an option's price moves when implied volatility moves by one point, and option vega covers it in depth. Vega traces the same tent as premium: highest at the money, smaller as strikes move away, and larger the more time is left on the contract.

WITH chain AS
(
    SELECT
        toInt32(round((toFloat64(strike_price) / toFloat64(underlying_close) - 1) * 100)) AS off_pct,
        toFloat64(vega)                                                                   AS leg_vega,
        if(days_to_expiry <= 14, 'near', 'far')                                           AS dte_bucket
    FROM global_markets.options_greeks
    WHERE underlying_symbol = 'SPY'
      AND date BETWEEN '2026-05-01' AND '2026-05-29'
      AND volume > 0
      AND iv_converged = 1
      AND ((days_to_expiry BETWEEN 7 AND 14) OR (days_to_expiry BETWEEN 25 AND 35))
)
SELECT
    concat(if(off_pct > 0, '+', ''), toString(off_pct), '%') AS strike_vs_spot,
    round(avgIf(leg_vega, dte_bucket = 'near')
          / (SELECT avgIf(leg_vega, dte_bucket = 'near') FROM chain WHERE off_pct = 0) * 100) AS vol_risk_7_to_14d_pct,
    round(avgIf(leg_vega, dte_bucket = 'far')
          / (SELECT avgIf(leg_vega, dte_bucket = 'far') FROM chain WHERE off_pct = 0) * 100)  AS vol_risk_25_to_35d_pct
FROM chain
GROUP BY off_pct
HAVING off_pct BETWEEN -6 AND 6
   AND countIf(dte_bucket = 'near') > 0
   AND countIf(dte_bucket = 'far') > 0
ORDER BY off_pct

Each bucket is indexed to the at-the-money reading for its own expiration range, which puts both curves on one scale starting at 100. At 25 to 35 days out, the strike 6% above spot carries 33% of the at-the-money vega. At 7 to 14 days out the same strike carries 7%. The butterfly sells the peak of that curve twice over. The condor sells two points down the slope. A rise in implied volatility after the trade goes on marks the butterfly's short body down harder, and the same asymmetry runs in its favour through IV crush, the drop in implied volatility that commonly follows a scheduled event.

What four legs cost to get filled

Each structure is four contracts to open and, when it is not held to expiration, up to four more to close. Every leg crosses a bid-ask spread, and spread width tracks how much of the chain actually trades. Our liquid vs volatile options guide separates a chain that moves a lot from one that trades a lot, and it is the second of those that governs fills.

SELECT
    symbol,
    round(avg(strikes))       AS strikes_traded_per_day,
    round(avg(busy_strikes))  AS strikes_over_100_lots_per_day
FROM
(
    SELECT
        underlying_symbol                            AS symbol,
        date,
        countDistinct(strike_price)                  AS strikes,
        countDistinctIf(strike_price, volume >= 100) AS busy_strikes
    FROM global_markets.options_greeks
    WHERE underlying_symbol IN ('SPY', 'KO', 'AAPL', 'MSFT', 'NVDA', 'AMD')
      AND date BETWEEN '2026-05-01' AND '2026-05-29'
      AND days_to_expiry BETWEEN 20 AND 45
      AND volume > 0
    GROUP BY symbol, date
)
GROUP BY symbol
ORDER BY strikes_traded_per_day DESC

On an average May 2026 session, SPY had 268 strikes with 20 to 45 days left print at least one contract, and 171 of those traded 100 lots or more. At the thin end of the group, KO showed 32 strikes trading and 9 of them at 100 lots or better. A condor needs four separate strikes to be tradable. A butterfly needs three, with double size at the middle one. In a chain where only a few dozen strikes print in a session, the strikes either structure wants can be among the ones that never traded at all. Commissions sit on top of that, and what it costs to trade options breaks the per-contract side down.

FAQ

What is the difference between an iron condor and an iron butterfly?

Both sell a put spread and a call spread on one expiration. The iron butterfly sells both short options at the same strike, usually at the money. The iron condor separates them, one strike below the stock and one above. The butterfly collects the larger credit, and the condor gets the wider profit zone.

How do you calculate the break-even on an iron butterfly?

Take the shared short strike, subtract the credit for the lower break-even, then add the credit for the upper one. A butterfly at the 100 strike opened for a $2.60 credit breaks even at $97.40 and $102.60, a profit zone $5.20 wide.

How do you calculate the break-even on an iron condor?

Subtract the credit from the short put strike, and add the same credit to the short call strike. A condor short the 95 put and the 105 call for a $1.30 credit breaks even at $93.70 and $106.30, a zone $12.60 wide.

Which one loses more, an iron condor or an iron butterfly?

Max loss on both is wing width minus credit, so with matching wings the structure that took in less premium risks more. With 5-point wings, the $2.60 butterfly risks $240 per contract and the $1.30 condor risks $370. The condor reaches that maximum only after a larger move in the stock.

Does an iron butterfly carry more vega risk?

Yes. Vega peaks at the at-the-money strike, and the butterfly sells two options there. The condor's short strikes sit further out, where vega reads a fraction of the peak, as the indexed ladder above shows.

Every panel here carries the exact SQL that produced it, one expander down. To rebuild either ladder on a different underlying or a different month, ask for it in plain English on the Strasmore terminal.