Long Put Butterfly

From Wikipedia, the free encyclopedia

It has been suggested that this article or section be merged into Butterfly (options). (Discuss)

This article is orphaned as few or no other articles link to it.
Please help introduce links in articles on related topics. (November 2006)

The long put butterfly spread is a neutral options trading strategy that is a combination of a bull put spread and a bear put spread. It is a limited profit, limited risk options trading strategy that is taken when the options trader thinks that the underlying stock will not rise or fall much by expiration. There are 3 striking prices involved in a long put butterfly spread and it is constructed by buying one lower striking put, writing two at-the-money puts and buying another higher striking put for a net debit.