Options strategies butterfly,regions bank exchange rate for euros,stock trading courses chicago,binary option trading strategies - PDF 2016

10.04.2015 admin
The butterfly spread is a neutral strategy that is a combination of a bull spread and a bear spread. Maximum profit for the long butterfly spread is attained when the underlying stock price remains unchanged at expiration. Maximum loss for the long butterfly spread is limited to the initial debit taken to enter the trade plus commissions. The long butterfly trading strategy can also be created using puts instead of calls and is known as a long put butterfly.


The short butterfly can also be created using puts instead of calls and is known as a short put butterfly. Short Call Butterfly = 1 ITM Short Call + 2 ATM Long Call + 1 OTM Short CallOR 1 Lower strike Bear Call Spread + 1 Higher strike Bull Call SpreadOR Long Straddle with net credit received when the trade is entered but with capped rewarded. This is typically a net credit trade as you are collecting more premium from the call options sold. Usually offer smaller return compare to straddle or strangle strategies with only slightly lower risk exposure.


Significant movement of the stock and options prices is required for this strategy to be profitable.



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