Are Iron Condors/Iron Butterflys really better than Short Straddles/Strangles?

[Tom1am]

I stand corrected

I should have written

**market maker**

 

[jones247]

Upon modeling the ratio fotm wings, I'm conviced that a call and put BWB is my best bet... better (safer & high probability) than a short straddle/strangle or IC with FOTM ratio wings...

Walt

 

[wayneL]

But it's more of a directional bet.

OK if that's what you want, but a different philosophy than straddle/starngle or fly/condor

 

[JohnGreen]

Grinder,
Those OTM wings are long (bought), not sold, which does not increase the margin requirements. In fact, it should reduce them compared to straddles. They also give a possibility of profiting in the event of a black swan, or in the unlikely event of a "melt up" (or whatever you might call a sudden dramatic rise).

Of course, 90% of the time the wings will expire worthless and cut into the profits, but........ in the 10% case, they'd come in mighty handy.

 

[Grinder]

JG,

Sure the margin is a little less forgiving, but it was margin size on one position when strikes are that much wider than a standard IC, that I don't like. Overall, can see how it can come to the rescue if the move is big enough.