Butterfly Spread

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Dictionary Says

Definition of 'Butterfly Spread'

An option strategy combining a bull and bear spread. It uses three strike prices. The lower two strike prices are used in the bull spread, and the higher strike price in the bear spread. Both puts and calls can be used.
Investopedia Says

Investopedia explains 'Butterfly Spread'

This strategy has limited risk and limited profit.

Related Definitions

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