Feb 26, 2025 · We take you through the details and examples below. Butterfly spreads are options strategies that involve using four options contracts with three different strike prices. …

In the United States, margin requirements for all options positions, including a butterfly, are governed by what is known as Regulation T. However brokers are permitted to apply more …

A long butterfly spread—as well as a short iron butterfly—consists of a long option at each of two “wing” strikes and two short options at a “body” strike halfway between the wings.

Dec 12, 2025 · Butterflies use four option contracts with the same expiration but three strike prices. It combines a bull spread and a bear spread with three strikes. What’s more, it can be …

2 days ago · Going long a butterfly, the trader buys a call of a low strike, sells two calls of a middle strike, and buys a call of a high strike. The three strikes are equidistant. The options have the …

Oct 24, 2023 · A butterfly spread is a limited-risk, limited-profit, advanced option strategy that offers the luxury of not having to continuously watch your brokerage account while this trade is …

Aug 26, 2025 · Butterfly Options Strategy: Beginner's Guide A long butterfly is a market-neutral, defined-risk options strategy using calls or puts: buy one lower strike, sell two middle strikes, …

Apr 17, 2025 · Butterfly spreads use specific option combos to bet on stock volatility levels. Long butterfly spreads profit if the stock price hits the middle strike at expiration. Short butterfly...

Jun 30, 2025 · The butterfly spread is a sophisticated options trading strategy that combines multiple positions to create a defined risk, limited reward profile. This neutral strategy involves …

Jun 16, 2023 · The butterfly option strategy is a neutral options strategy that involves simultaneously buying and selling many options contracts with different strike prices.