I have been experimenting with putting on Iron Butterflies in high volatility stocks. The risk/reward characteristics of these spreads seem pretty hard to beat. I was wondering if this is a strategy others have tried. Ex: In RMBS you could sell the 25-23-21 Iron butterfly for 1.80 by (using mid market prices) with the stock at 24.20 Basically the spread had 1.80 per contract possible gain with only a .20 per contract possible loss. Obviously in this case not only would you need a move down as you would be short deltas (23.00 being your max gain price) but the reason the options carry such a high volatile is because of their likelihood for large moves. In the case of RMBS it is currently trading 22.45 and the spread with expire tomorrow a winner (assuming no news on their lawsuit) Does anyone else use this strategy? It would seem to work the best for stocks trading at a high volatility because of takeover rumors or lawsuits as these can be dragged on for some time.