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Butterfly Spread

Long Butterfly Spread

A long butterfly spread is a strategy that involves simultaneously purchasing an ITM call, selling two ATM puts, and buying an OTM call.
  • Non-Directional strategy
  • Typically consists of buying an ITM call, selling two ATM puts, and buying an OTM call.
  • Different strike prices and expiry dates
A Long Call Butterfly Spread is a neutral strategy that anticipates minimal volatility in the underlying price. The technique is a hybrid of bull and bear spreads. This strategy should be used when there is no expectation of volatility in the underlying's price
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