🦋 Iron Butterfly Strategy

Performance Summary & Analysis

SPY Options Jan 2023 - Jan 2026 25 Contracts
Total P&L
+$136,940
3-Year Performance
Win Rate
59.0%
85 wins / 59 losses
Total Trades
144
Weekly entries
Avg P&L/Trade
+$951
Per trade average
Profit Factor
1.49
Wins / Losses ratio
Sharpe Ratio
1.24
Risk-adjusted return

⚙️ Strategy Configuration

Underlying
SPY
Contracts
25
Wing Width
$10
Entry Day
Monday
Entry Time
9:38 AM
Exit Day
Thursday
Exit Time
2:40 PM
Expiry
Friday

Exit Thresholds

🎯 Profit Target ≥ 50% of max profit Lock in gains early
🏆 Max Profit Exit ≥ 90% of max profit Near full potential
🛑 Stop Loss ≤ -80% of max profit Cut losses

📊 Win/Loss Analysis

Win Rate Breakdown

Winners (85) 59.0%
59%
Losers (59) 41.0%
41%

Exit Reasons

📅 Scheduled (Thursday) ~60%
🎯 50% Profit Target ~25%
🏆 90% Max Profit ~3%
🛑 Stop Loss (-80%) ~7%
📆 Expiry (Fri close) ~5%

💰 P&L Statistics

Winning Trades

Average Win +$4,875.11
Largest Win +$17,974.63
Best Trade Date Nov 17-20, 2025
Total Wins +$414,384

Losing Trades

Average Loss -$4,702.44
Largest Loss -$12,678.83
Worst Trade Date Jul 22-25, 2024
Total Losses -$277,444

⚠️ Risk Assessment

Max Drawdown

$32,414

Max Risk per Trade

~$10-13K

Stop Loss Hits

9 trades

For Your $513K Account

Metric Value % of Capital Assessment
Max Risk per Trade ~$12,000 2.3% ✓ Conservative
Max Drawdown $32,414 6.3% ✓ Acceptable
Worst Single Loss $12,679 2.5% ✓ Manageable
3-Year Return $136,940 26.7% ✓ Strong

📏 Position Size Comparison

Metric 20 Contracts 25 Contracts Difference
Total P&L $109,552 $136,940 +$27,388
Avg P&L/Trade $761 $951 +$190
Max Drawdown $25,931 $32,414 +$6,483
% of $513K at Risk 1.9% 2.3% +0.4%

📡 Backtest Data Quality

Price Source Distribution

Real SIP Data 93 trades (64.6%)
64.6%
Black-Scholes Fallback 51 trades (35.4%)
35.4%

Fill Price Logic

BUY (Long options) Ask price
SELL (Short options) Bid price

Using actual bid/ask spread provides realistic fill estimates vs. optimistic midpoint pricing.

💡 Key Insights

Consistent Profitability

59% win rate with 1.49 profit factor demonstrates edge over 144 trades across varying market conditions.

Good Risk-Adjusted Returns

Sharpe ratio of 1.24 indicates favorable returns relative to volatility. Max drawdown of 6.3% is well within tolerance.

Live vs Backtest Validation

Live trade (Jan 2026) returned +$2,775 vs backtest prediction of +$1,375 — live outperformed 2x.

⚠️

Volatility Events

Strategy suffered during high-vol periods (Aug 2024, Apr 2025). Stop losses limited damage but multiple consecutive losses occurred.

⚠️

Black-Scholes Fallback

35% of backtest used theoretical pricing. Actual results may vary for older periods without SIP data.

📋 Recommendation

Recommended Position Size

25 Contracts

For $513,238 account

Expected Annual P&L
~$45,600
Expected Annual Return
~8.9%
Risk per Trade
~2.3%
Max Expected Drawdown
~6.3%