Neutral2 legscreditneutral

Sell a call and a put at the same strike. The largest credit in the menu, collected for the stock going nowhere — and an unlimited loss in both directions.

The Strategy Builder does not construct this one — the reference shelf is broader than the picker. You can still build it by hand: add the legs below in the builder's leg table.

The long straddle inverted. You collect both premiums and keep them if the stock finishes at the strike; you lose as it travels away in either direction.

This is short volatility in its purest form. There is no wing, no cap, and no direction — only a bet that realized movement comes in under what implied volatility priced.

It is the highest-credit, highest-risk structure in this chapter, and the two facts are the same fact.

Priced off the guide's shared chain, on a $50 stock. Every figure beneath the diagram is computed from these legs by the same engine the Strategy Builder uses.

An inverted V, peaking at the strike where both options expire worthless.

Two break-evens at the strike plus and minus the credit — $44.60 and $55.40 on the example.

Both tails run to unbounded loss. There is no maximum loss to report on the upside at all.

The condition is an expectation that implied volatility overstates coming movement, with enough capital and tolerance to sit through being wrong.

Because losses are unbounded, brokers margin it heavily and the capital held is set by a margin rule rather than by any figure a payoff diagram can compute.

The iron butterfly is this position with wings bought — much smaller credit, defined risk. That comparison is the practical decision.

Like everything in this guide, these are descriptions of structures and conditions — context for your own decisions, not instructions to trade.