Long Call Butterfly
Outlook: Neutral
Butterflies and condors
Three-strike call structure. Pays max if underlying lands at the middle strike on expiration.
Max profit
(Wing width) - debit, reached only at the middle strike at expiration.
Max loss
Debit paid.
Breakeven
Lower strike + debit, and upper strike - debit.
Legs
Long
1×
call
ATM −5
Short
2×
call
ATM
Long
1×
call
ATM +5
Structure
Long 1 lower-strike call + short 2 middle-strike calls + long 1 upper-strike call. Equal wing widths.
When to use
Strong conviction the underlying will pin a specific level on expiration day. Cheap, high-probability-of-loss, high-payoff if right.
Example
SPY at $450. Long 445 / short 2x 450 / long 455 call butterfly for $1 debit. Max profit $4 per share at SPY = $450 on expiration.
Notes
- Tent-shaped payoff. Almost always closed before expiration to capture some of the time decay without holding pin risk.
Build it in the simulator
Open this structure in the app, adjust spot, IV, and DTE, and watch the payoff and Greeks move.
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