the biggest thing here is.. how can you really consider the butterflys max payout when that rarely occurs... another way to delusion yourself.. just my thoughts..
Exactly! 'Fly's max payout is a myth and should not be taken into consideration. However, a wide IB may be a viable strategy if the target profit is in the 10-20% range of the max risk.
E.g. SPY Sep 135/140/145 iron butterfly may be established for 3.66 credit. The risk is 1.34. Once SPY moves down to 139 or stays at 140 within next week or two, the spread can be closed for 3.40 or so. That's .26 profit per 1.34 risked or ~20%. The question is how much can one lose (besides full loss) and what is the appropriate position size.