Iron Butterfly

An options strategy that sells a straddle and buys a protective strangle to profit from low volatility.

An iron butterfly sells an at-the-money call and put while buying a further out-of-the-money call and put to cap risk. It profits when the underlying asset finishes near the middle strike at expiration and volatility stays low, but losses are limited on both sides by the protective wings.

Expecting the stock to stay flat into earnings, he set up an iron butterfly instead of just guessing a direction.