F. Other Option Strategies (continued)

• 3. BUTTERFLY SPREAD

  • The butterfly spread is a neutral position that is a combination of both a bull and bear spread.
    • Example: P = $60
      July 50 call: $12July 60 call: 6July 70 call: 3
      
    • Butterfly spread:
      Buy 1 July 50 call: ($1200)Sell 2 July 60 calls: 1200Buy 1 July 70 call: (300) (300)
      

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