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A long butterfly options strategy consists of the following options: Long 1 call with a strike price of (X − a) Short 2 calls with a strike price of X; Long 1 call with a strike price of (X + a) where X = the spot price (i.e. current market price of underlying) and a > 0. Using put–call parity a long butterfly can also be created as follows:
A short iron butterfly option strategy will attain maximum profit when the price of the underlying asset at expiration is equal to the strike price at which the call and put options are sold. The trader will then receive the net credit of entering the trade when the options all expire worthless. [2]
Long butterfly spreads use four option contracts with the same expiration but three different strike prices to create a range of prices the strategy can profit from. [1] [2] Straddle - an options strategy in which the investor holds a position in both a call and put with the same strike price and expiration date, paying both premiums (long ...
The iron butterfly options trading strategy aims to profit investors during periods of low volatility. Also known as the “short iron butterfly” or the “iron fly,” the strategy makes its ...
A long put ladder is also called a bear put ladder. [8] A short put ladder is also called a bull put ladder. [9] A ladder can be seen as a modification of a bull spread or a bear spread with an additional option: for instance, a bear call ladder is equivalent to a bear call spread with an additional long call. A bull put ladder is equivalent to ...
Payoffs from buying a butterfly spread Payoffs from selling a straddle Payoffs from a covered call. Combining any of the four basic kinds of option trades (possibly with different exercise prices and maturities) and the two basic kinds of stock trades (long and short) allows a variety of options strategies. Simple strategies usually combine ...
The iron condor is an options trading strategy utilizing two vertical spreads – a put spread and a call spread with the same expiration and four different strikes. A long iron condor is essentially selling both sides of the underlying instrument by simultaneously shorting the same number of calls and puts, then covering each position with the purchase of further out of the money call(s) and ...
There’s no official definition for either of these accounts. Rather, each is a type of deposit account that can earn you incremental interest on your balance, helping you to grow your savings.
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