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Iron Butterfly

By Luca Moschini
An option transaction that employs four separate contracts as part of a plan to profit from movements in the price of stocks or futures that are contained within a predetermined range. In addition, the trade is set up to gain from a drop in implied volatility. Predicting the moment when option prices are anticipated to fall in value generally is the key to using this trade as part of a successful trading plan. This typically happens when there is a slight upward trend or sideways movement.

real time options order flow

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