Derivatives Strategies
Butterfly Spread
Definition
What is Butterfly Spread?
Example in practice
How This Looks in Practice
The trade earns most if the asset finishes near the middle strike.
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Related Terms
Derivatives Strategies
Covered Call
A strategy that owns the underlying asset and sells call options against it.
Derivatives StrategiesProtective Put
A strategy that owns an asset and buys a put to limit downside.
Derivatives StrategiesCollar
A strategy combining a protective put with a written call, often to reduce hedging cost.
Option GreeksDelta
The estimated change in an option's price for a small change in the underlying price.