The Long Butterfly: Targeting a Single Strike Price

Selling two at-the-money calls while buying calls above and below them forms a butterfly, a position built around one target price at expiration.

0:00 Introduction: Long Call Butterfly
0:32 Three Strikes: Buy Wings, Sell Body
0:55 Neutral Outlook Requirement
1:34 Example: Stock at $90
2:08 Maximum Loss: $400 Debit Paid
2:26 Maximum Profit: $600 ($10 Width - $4 Debit)

Register to view the complete Four Legs, One Position: How Condors and Butterflies Are Built webinar: https://bit.ly/4gmJCWo.