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Butterfly




The sale (or purchase) of two identical options, together with the purchase (or sale) of one option with an immediately higher strike and one option with an immediately lower strike.


Additional Comments:

All options must be the same type, have the same underlying, and have the same expiration date.

Related Terms:

Calendar Spread
Applying to derivative products, a strategy in which there is a simultaneous purchase and sale of ...

Long Straddle
A long straddle is the simultaneous purchase of a put and a call on the same ...

Vertical spread
A spread in which one option is bought and one option is sold, where the options ...





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