How can iron butterflies be used to hedge against volatility in the cryptocurrency market?

1 answers

• Savage ShapiroApr 22, 2025 · 4 months ago
  Iron butterflies can be used as a hedging strategy to mitigate the impact of volatility in the cryptocurrency market. This options strategy involves selling both a call and a put option at the same strike price, while also buying a call and a put option at a higher and lower strike price, respectively. By doing so, traders can profit from a stable market while limiting potential losses during periods of high volatility. Iron butterflies provide a balanced position that can benefit from range-bound market conditions, making them a useful tool for hedging against volatility in the cryptocurrency market.
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