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Standard Butterfly XYZ factitious index @ 89.2 with 4 days to expiration Long Spread $6.2 Buy Sep 8 XYZ Call @ 8.9 Sell Sep 90 XYZ Call @.9 Short Spread $6.2 Sell Sep 90 XYZ Call @.9 Buy Sep 9 XYZ Call @.60.00 2. Max Risk Long Spread: paid =.00 Short Spread: difference between strikes (), minus the received = 2.6 Standard Butterfly XYZ factitious index @ 89.2 with 4 days to expiration Long Spread $6.2 Buy Sep 8 XYZ Call @ 8.9 Sell Sep 90 XYZ Call @.9 Short Spread $6.2 Sell Sep 90 XYZ Call @.9 Buy Sep 9 XYZ Call @.60.00 2. Butterfly.6 Max Risk Long Spread: paid =.00 Short Spread: difference between strikes (), minus the received = 2.6 6
Standard Butterfly XYZ factitious index @ 89.2 with 4 days to expiration Buy Sep 8 XYZ Call @ 8.9 Sell 2 Sep 90 XYZ Call @.9 Buy Sep 9 XYZ Call @.60 At Expiration: Max Risk =.6 Max Gain = -.6 = 4 4. Break-Evens = 8.6 and 94..6 7 Butterfly Profit & Loss Graph 4. Buy Sep 8 Call Sell 2 Sep 90 Call Buy Sep 9 Call.6 Profit & Loss -0.6-8.6 94. 8 90 9-0.6 - - Stock Price at Expiration 8 4
Skip-Strike or Modified Butterfly XYZ factitious index @ 89.2 with 4 days to expiration Buy 90 Call Sell 2 9 Call Buy 200 Call Sell 200 Call Buy 20 Call.68 Butterfly + Short Spread.99 Now just OTM B-Fly Buy 90 Call Sell 2 9 Call Buy 20 Call. Additional Risk Means Margin Requirement = $00 per b-fly and is the max risk of the trade. 9 Skip-Strike or Modified Butterfly XYZ factitious index @ 89.2 with 4 days to expiration Buy Sep 90 XYZ Call @.88 Sell 2 Sep 9 XYZ Call @.7 Buy Sep 20 XYZ Call @ 0.9. At Expiration: Max Risk = - 0. = 4.69 Max Gain = + 0. =. Break-Even at Exp. = 200. 0
Profit & Loss Graphs Profit & Loss - 90 9 200 20 - - Stock Price at Expiration Skip-Strike Profit & Loss Graph. Buy 90 Call Sell 2 9 Call Buy 20 Call. Profit & Loss 0. - - 200. 90 9 200 20 - Stock Price at Expiration -4.69 2 6
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