print Butterfly Spread Printable Version

Butterfly Spread Risk Graph

Butterfly Spread - Components

 There are 3 option trades to establish for this strategy : 1. Buy To Open X number of In The Money Call / Put Options. 2. Buy To Open X number of Out Of The Money Call / Put Options. 3. Sell To Open 2X number of At The Money Call / Put Options.

Buy ITM Call + Buy OTM Call + Sell 2 X ATM Call



Butterfly Spread - Expectation

Stagnant



Butterfly Spread - Risk / Reward

Maximum Profit: Limited

Maximum Loss: Limited



Butterfly Spread - Breakeven Point

Upper Breakeven Point : Higher Strike Price - Net Debit

Lower Breakeven Point : Net Debit + Lower Strike Price







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