Short butterflies are options spreads that tend to perform well in volatile markets. These positions were first tested on the S&P 500 index back in 2006, and they lost money in part because market volatility had dried up over the previous five years. Now that volatility has returned with a vengeance, let’s examine whether short butterflies are effective ways to exploit current volatile conditions. The following study compares the original test’s results (2001 to 2006) to the overall performance from 2001 to 2008.