Skip Strike Butterfly

Because you 'skip' over strikes when constructing the wide wing. Instead of using consecutive strikes like a standard butterfly, you skip to a more distant strike, creating the asymmetric structure.

Not universally better - different tools for different situations. Skip strike is better when you have directional bias and want credit entry. Standard butterfly is better when you're purely neutral and want lowest max loss.

They're the same thing. 'Broken wing butterfly' (BWB) and 'skip strike butterfly' are different names for the same strategy - a butterfly with unequal wing widths.

No! That's the beauty of skip strike. If it's a put skip (bullish) and the stock rises, you're in the no-risk zone - you keep any credit. Only if the stock falls significantly toward the wide wing do you risk loss.

Skip strike can be entered for credit (no upfront cost), has defined risk, and profits from time decay. Long calls/puts cost money and decay over time. Skip strike is better for 'stay above/below this level' thesis vs 'stock will move big.'

Balance credit and max loss. Wider skip = more credit but higher max loss. Start with achieving credit entry, then check if max loss is acceptable (typically < 2% of account). Adjust skip distance until both criteria are met.

Options: 1) Widen the skip, 2) Move body closer to ATM, 3) Add more DTE, 4) Wait for higher IV. If still can't get credit, accept small debit (< 20% of narrow width) or skip the trade.

Near expiration, high negative gamma concentrates at the body strike. If stock is near the body, P&L swings wildly with small moves. Manage by closing before 7 DTE if stock is near body.

Options: 1) Close for partial loss before max loss, 2) Roll wide wing further out (costs debit), 3) Accept and hold. Generally, if stop loss hit, close rather than adjust. Adjustments in butterflies often don't improve outcome.

Yes, but it's complex (12 legs total to close and reopen). Usually better to close current position and open fresh in new expiration if still want exposure.

Place the body far OTM (e.g., 20% below current price). Wide skip can often achieve zero cost. If crash occurs to body level, significant profit. If not, no cost. Trade many contracts for meaningful protection.

Research suggests: body at 30-35 delta, narrow wing 1 strike, wide wing distance that achieves credit. Enter when IV Rank > 25%, 21-45 DTE, no events. Exit at 50% profit, 100% of credit loss, or 7 DTE.

Generally similar risk-adjusted returns but different profiles. Skip strikes have higher probability of profit (no-risk zone) but higher max loss when wrong. Iron condors have symmetric risk. Skip strikes may have edge in directional markets.

2% max loss per position, 8% total to butterflies. Mix bullish and bearish for delta balance. Diversify across 4-6 underlyings. Track aggregate Greeks and rebalance weekly.

Yes. Common combinations: 1) Add vertical spread on profitable side = iron condor variant, 2) Multiple skip strikes at different bodies = ladder, 3) Skip strike + long stock = covered skip. Each adds complexity.