Iron Fly strategies for the week ending 26th August

[Michael Gonsalves]

The Iron Fly strategy is a good options strategy with a good risk-reward profile. It requires active management and lots of capital.

I presently have two Iron Flies in the Nifty and the Bank Nifty.

While the Nifty Iron Fly is giving a handsome gain of 1.71%, the Bank Nifty Iron Fly is underwater. However, the breakeven point is still far away. As we get closer to expiry, the IVs will also cool down and lead to accelerated decay in the options prices.

[Siddharth Raja]

I have been doing Iron Condors and Iron Flys with 30 to 45 days to expiry. DO you think weeklies are safe inspite of the gamma risk.

[Michael Gonsalves]

I have been doing Iron Condors and Iron Flys with 30 to 45 days to expiry. DO you think weeklies are safe inspite of the gamma risk.

Monthlies are better and easier to handle because the range is wider. However, the waiting time to realize the gain (or loss) is longer.

I prefer to do both at the same time.