Annotated Bibliography for the Iron Butterfly  http://www.optionseducation.org/strategies_advanced_concepts/strategies/long_iron_butterfly.html  This source gives an overview of the Iron Butterfly option strategy. It goes in depth into various factors an investor might want to consider when creating a strategy. These factors include: motivation, variations, max loss, max gain, volatility, time decay, and risk. There is also a picture of the strategy’s payoff graph.   http://www.investopedia.com/articles/active-trading/030314/what-iron-butterfly-option-strategy.asp  This source also gives an overview of the strategy. It goes more into detail of how the strategy is used and its purpose in a portfolio. There is also an example that it included which it helpful in picturing how the strategy is formed. It also includes advantages as well as disadvantages that it has to offer. Example: ABC Company is trading at $50 in August. Eric wants to use an iron butterfly to profit on this stock. He writes both a September 50 call and put and receives $4.00 of premium for each contract. He also buys a September 60 call and September 40 put for $0.75 each. The net result is an immediate $650 credit after the price paid for the long positions is subtracted from the premium received for the short ones ($800-$150). Premium received for short call and put = $4.00 x 2 x 100 shares = $800 Premium paid for long call and put = $0.75 x 2 x 100 shares = $150 $800 - $150 = $650 initial net premium credit    http://www.optionstrading.org/strategies/volatile-market/reverse-iron-butterfly-spread/  This source talks about the reverse iron butterfly strategy. It describes what it is and when an investor should employ the strategy instead of the original iron butterfly. It says how to create the strategy and gives key points about the strategy. The source also gives the strategy’s potential profit and loss scope. https://www.fidelity.com/learning-center/investment-products/options/options-strategy-guide/long-iron-butterfly-spread  Similar to the other sources, but goes into more detail in some areas. It adds a market forecast into the mix. It says that a forecast of the market needs to be done in order to execute the strategy effectively. There is also discussion of the strategy included, which says the impact of the strategy and what people use it for. The impacts mentioned are: stock price change, change in volatility, and time. There is some interesting controversy on the nature of the name having long in the beginning because of the net credit that is being taken on. http://www.moneyshow.com/articles.asp?aid=OptionsIdea-30500 This is an article that discusses how a hedge fund may use an option. It is used as a way to hedge against some of the risk in a portfolio. Because of its four positions in both long and short options contracts, there is a market neutral output. Unintentional risk exposure is decreased when using the strategy. The article also talks about an interesting 1-2-3 iron butterfly. This may be an interesting point to talk about with further research. http://seekingalpha.com/instablog/779463-rwiegs/122648-options-income-strategies-may-be-dangerous-to-your-health  This article takes on an opposing view to options trading. It makes the argument that when looking at the statistics of stock return risk, there are some basic intuitions that are left out. Specifically if you are selling options, there should be a 68% chance that the stock will stay within one standard deviation and therefore you will make money. This doesn’t seem to be the case because of time decay and the expiration of the option. Therefore the chance that the price will not move i