Long Iron Butterfly, Long Iron Condor, Wrangles and their Synthetics: Risk, Reward, G

Hello_Dollars · May 24, 2004

Quote from iceman1:

Hello_Dollars is just more humble and relaxed in his ET image than other options "gurus" are at times... but obviously close in stature... sycophantically speaking of course!

I have read his posts for a while and always got a lot out of them.

IcE

((p.s. HD... K, did I say it right... ?! You gona paypal me the $$ now!?))

It's on the way, my friend.

Maverick74 · May 24, 2004

Quote from damir00:

there isn't even consistency internal to individuals! according to the LIFFE strategy pages a call spread is "long" if you're short the higher strike - unless it's a ratio spread, in which case it's "long" if you're short the lower strike.

oy.

Generally if you pay a debit, you are long the spread and if you receive a credit, you are short the spread. This is the general rule of thumb.

Maverick74 · May 24, 2004

Quote from abogdan:

Well, I don't recall Natenberg's definition of a wrangel, but I have traded them couple of times. They are some what better for Low - High - Low volatility periods than many types of butterflies.
Cheers,

Sorry guys I was busy today. It looks like the option threads have been pretty busy today. A wrangle is a backspread.

Maverick74 · May 24, 2004

Quote from damir00:

what is the "standard terminology" for being simultaneously long a ratio put spread and ratio call spread?

A wrangle.

Maverick74 · May 24, 2004

Quote from CPTrader:

I have noticed many options traders and options trading book authors use different notations for different strategies and their synthetics and also indiscrimantely (or so it appears, refer to strategies as being short or long). This can be very confusing. what is even more bothersome, is that at times, it seems to me that it is not just a question of mixing up notations, but simply being wrong.

For example, I recently saw a long iron butterfly described as the synthetic combination of a "Short Bull Put Spread" and a "Short Bear Call Spread". Is that not wrong??

I thought that synthetic combination was a SHORT iron CONDOR, not a long iron butterfly? Am I wrong?

Also I believe that a SHORT iron condor is also a synthetic short strangle and a long strangle combined together. Correct? What other synthetic versions of the SHORT/long iron condor or the SHORT/long iron butterfly are you aware of?

Finally, I would love for others to share their opinions on the risk and reward of SHORT/long iron condors and butterflies, wrangles ( a strategy hardly ever discussed), plain butterflies, condors , their peculiarities, when best to be used, what to be careful of and how they view these strategies from a synthetic decomposition perspective.

Any other thoughts on these strategies in this thread would also be appreciated. Thank You.

A short iron condor is long the body, short the wings. This can be used as a great short volty play.

Hello_Dollars · May 24, 2004

Quote from Maverick74:

A short iron condor is long the body, short the wings. This can be used as a great short volty play.

A short iron is vega positive, is it not?

CPTrader · May 24, 2004

Quote from Maverick74:

A short iron condor is long the body, short the wings. This can be used as a great short volty play.

I thought it was achieved by being long the wings and short the body e.g. selling a strangle and buying an outer strangle... or selling a bull put spread and selling a bear call spread ?

CPTrader · May 24, 2004

Quote from Maverick74:

Sorry guys I was busy today. It looks like the option threads have been pretty busy today. A wrangle is a backspread.

I thought a wrangle is a call backspread combined with a put backspread.

Maverick74 · May 24, 2004

Quote from CPTrader:

I thought it was achieved by being long the wings and short the body e.g. selling a strangle and buying an outer strangle... or selling a bull put spread and selling a bear call spread ?

Actually I think you are right, I posted too quick earlier. I never use the term short iron condors. I was thinking of just a short condor. Semantics will kill you on this board. LOL

CPTrader · May 24, 2004

Quote from Maverick74:

A short iron condor is long the body, short the wings. This can be used as a great short volty play.

Alright now I am getting confused.
so many different notations and conventions...

What is this: long strangle at the wings, short body strangle - LONG OR SHORT IRON CONDOR

What is this: short strangle at the wings, long body strangle - LONG OR SHORT IRON CONDOR.

Where do you receive a credit - Long or Short Iron condor.

I have seen both referred to as long or short by different traders, authors...is there no convention?