Butterfly Spread

What Does Butterfly Spread Mean?
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 explains Butterfly Spread
This strategy has limited risk and limited profit.

Related Terms

Bear Spread
Bull Spread
Debit Spread
Iron Condor
Multi-leg Options Order
Option
Positive Butterfly
More Related Terms

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