Option spreads often have rather fanciful names butterfly, iron butterfly, condor, and alligator, to name a few. All of these strategies are multi–leg spreads and, to some traders, seem designed primarily to generate fees for brokers. This isn’t entirely fair (nor entirely unfair). There are times when one of these more complex spreads can be a useful trading tool.

For example, a long butterfly spread can offer a way to sell volatility (i.e., profit from high and declining volatility through short options) while removing the risk inherent in a naked option position.