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Butterfly spread
An options strategy built on four trades at one Expiration date and three different strike prices. For Call options, one Option each at the High and Low strike price are bought, and two options at the middle strike price are sold. For Put options, the trades are reversed. This is a Limited risk , limited Return strategy that pays off when the price of the Underlier remains around the middle strike price. This strategy is essentially a Combination of a Bull and Bear spread.
Related Terms: 20
ACH , Bear , Bull , Call , Call option , Combination , Expiration date , High , Limited risk , Low , Option , Put , Put option , Return , Risk , Ratio , Rent , Spread , Trade , Underlier
Semi Related Terms: 774 CLICK HERE TO VIEW
10-K ,
52-week high ,
52-week low ,
Allowance for depreciation ,
Asset/equity ratio ,
Average accounting return ,
ACH ,
Adjustable rate ,
Accrual of discount ,
Amortization of premium ,
Asked price ,
Asking price ,
At par ,
All or any part ,
At best ,
At call ,
Adjustable rate preferred stock ,
Adjusted futures price ,
All-risks coverage ,
At risk ,
Annual return ,
Add-on service ,
Abstract of title ,
As is ,
Attorney in fact ,
Adjustable Rate Mortgage ,
Adjustment date ,
Advance rate ,
Annual Percentage Rate ,
Applicable federal rate ,
Assignment of mortgage ,
A shares ,
Assets under management ,
Average price per share ,
Aggregate exercise price ,
Alligator spread ,
American option ,
American-style option ,
Asian option ,
At the money ,
Average option ,
Absorption rate ,
Across the board ,
Additional paid-in capital ,
Ad valorem ,
Amended return ,
Against the box ,
At the bell ,
At the close ,
At the figure ,
At the full ,
At the market ,
At the opening order ,
Automated Pricing and Reporting System ,
Away from the market ,
Back pay ,
Below the line ,
Books of final entry ,
Books of original entry ,
Burn rate ,
Banking Act of 1933 ,
Benchmark interest rate ,
Bid/ask spread ,
Bid-to-cover ratio ,
Block trade ,
Bureau of Public Debt ,
Brought over the wall ,
Buying on margin ,
Buy limit order ,
Buy on close ,
Buy on opening ,
Buy the book ,
Balance of payments ,
Bank Rate ,
Base interest rate ,
Bear market ,
Board of Governors ,
Breaking the syndicate ,
Bill of exchange ,
Bill of sale ,
Breach of trust ,
By the book ,
Base rate ,
Blended rate ,
Broker loan rate ,
Benchmark risk ,
B shares ,
Bear straddle ,
Bull straddle ,
Butterfly spread ,
Buy and write ,
Balanced investment strategy ,
Barbell strategy ,
Box spread ,
Bullet strategy ,
Break-even tax rate ,
Blow-off top ,
Breadth-of-market theory ,
Bear ,
Beat the gun ,
Bull ,
Bull market ,
Cash asset ratio ,
Cash ratio ,
Collection ratio ,
Cost Of Goods Sold ,
Cost of sales ,
Cleared date ,
Call ,
Call date ,
Call price ,
Call protection ,
Call risk ,
Certificate of Participation ,
Combination bond ,
Committee on Uniform Securities Identification Procedures ,
Conversion option ,
Conversion parity price ,
Conversion price ,
Conversion ratio ,
Coupon rate ,
Credit risk ,
Current production rate ,
Call money rate ,
Code of procedure ,
Crossed trade ,
Capitalization of income ,
Capitalization rate ,
Cap rate ,
Civilian unemployment rate ,
Consumer Price Index ,
Cost of Living Adjustment ,
Cost-of-living index ,
Council of Economic Advisers ,
Cash and carry trade ,
Cash price ,
Chasing the market ,
Chicago Board of Trade ,
Commodity-product spread ,
Crack spread ,
Crush spread ,
Country risk ,
Combination plans ,
Cost-of-living rider ,
Certificate of stock ,
Chicago Board Options Exchange ,
Cost of carry ,
Certificate of title ,
Contract for deed ,
Cancellation of debt ,
Certificate of Claim ,
Cost of debt capital ,
Cost of funds ,
Credit limit ,
C shares ,
Calendar spread ,
Call option ,
Call ratio backspread ,
Call swaption ,
Class of options ,
Close to the money ,
Combination ,
Counterparty risk ,
Covered call ,
Covered option ,
Covered put ,
Credit spread ,
Certificate of Occupancy ,
Closing date ,
Cloud on title ,
Cash or Deferred Arrangement ,
Combination annuity ,
Class A Shares ,
Class B Shares ,
Crash of 1929 ,
Crash of 1987 ,
Child and dependent care credit ,
Consolidated tax return ,
Coefficient of determination ,
Cup and handle ,
Certificate of delivery ,
Close a position ,
Closing price ,
Cornering the market ,
Curbs in ,
Date draft ,
Deposit in transit ,
Date of issue ,
Date of payment ,
Debt limit ,
Distribution date ,
Dollar price ,
Due date ,
Division of Enforcement ,
Division of Investment Management ,
Division of Market Regulation ,
Date of record ,
Dividend in arrears ,
Dividend payout ratio ,
Dividend rate ,
Desk (the) ,
Diminishing return ,
Discount rate ,
Division of labor ,
Daily trading limit ,
Delivery price ,
Dated date ,
De-escalation clause ,
De facto ,
Durable Power of Attorney ,
Date of maturity ,
Debtor in possession ,
Debtor-in-possession financing ,
Deed of Release ,
Deed of Trust ,
Default risk ,
Discharge of bankruptcy ,
Discharge of lien ,
Due-on-sale clause ,
Debit spread ,
Deep in the money ,
Deep out of the money ,
Delta spread ,
Diagonal spread ,
Deed of Surrender ,
Department of Housing and Urban Development ,
Defensive investment strategy ,
Diversifiable risk ,
Dogs of the Dow ,
Daily high ,
Daily low ,
Daylight trade ,
Day trade ,
Depth of market ,
Downside risk ,
Efficiency ratio ,
Effective annual interest rate ,
Eurodollar certificate of deposit ,
Embedded option ,
Equity risk premium ,
Event risk ,
Ex-legal ,
Either-or order ,
Exchange rate ,
Economic growth rate ,
E-mini ,
Exchange for futures ,
Exchange for physical ,
Exchange of spot ,
Ex-pit transaction ,
Effective date ,
Excluded risk ,
Effective tax rate ,
Equity option ,
Ex-all ,
Exchange ratio ,
Expected return ,
Exit strategy ,
European-style option ,
Exchange-traded option ,
Exercise limit ,
Exercise ratio ,
Expiration cycle ,
Expiration date ,
Expiration time ,
Ex-warrants ,
Economic rent ,
Education IRA ,
Employee Retirement Income Security Act of 1974 ,
Exclusion ratio ,
Ex-rights ,
Ex-rights date ,
Even spread ,
First In First Out ,
Fixed-charge coverage ratio ,
Federal Savings and Loan Association ,
First call date ,
Floating-rate bond ,
Flow of funds ,
Full price ,
Federal Call ,
Fill or kill ,
Front-ending an order ,
Floating exchange rate ,
Foreign currency option ,
Foreign exchange rate ,
Forward exchange rate ,
Forward P/E ,
Factors of production ,
Favorable balance of trade ,
Federal Reserve Discount Rate ,
Federal Trade Commission ,
Free market price ,
Free trade ,
Fluctuation limit ,
Forward price ,
Futures option ,
Futures price ,
Fee-for-service ,
Form 8-K ,
Form S-1 ,
Friends and family offering ,
Financial risk ,
Fixed rate ,
Fixed-rate loan ,
Fixed-Rate Mortgage ,
Floating rate ,
Forward interest rate ,
Forward Rate Agreement ,
Full faith and credit ,
Family of funds ,
Fund of funds ,
Far option ,
Free and clear ,
Free right of exchange ,
Federal ID Number ,
Forward trade ,
First-round financing ,
G-7 ,
GDP implicit price deflator ,
General Agreement on Tariffs and Trade ,
G-8 ,
Growth strategy ,
Gross spread ,
Growth and income fund ,
Grant date ,
Group IRA ,
Gather in the stops ,
High-grade bond ,
High yield ,
Hart-Scott-Rodino Act of 1976 ,
Hit the bid ,
House call ,
House of issue ,
Hedge ratio ,
Health Insurance Portability and Accountability Act ,
High ,
High-flyer ,
High-tech stock ,
Holder in due course ,
High credit ,
High-ratio mortgage ,
Home equity line of credit ,
Horizontal spread ,
Head and shoulders ,
High-low index ,
Hammering the market ,
Held at the opening ,
Holding the market ,
Horizontal price movement ,
In escrow ,
Interest rate collar ,
Interest rate risk ,
Interest rate swap ,
Issue date ,
In-house ,
Investment Advisor Act of 1940 ,
Investment Company Act of 1940 ,
In line ,
Inflation rate ,
Intercommodity spread ,
Interdelivery spread ,
Interest rate futures ,
Intermarket spread ,
Intracommodity spread ,
Interbank Rate ,
International trade ,
Insider Trading sanctions Act of 1984 ,
Internal Rate of Return ,
Indication of interest ,
In intestacy ,
Interest rate ,
Interest rate cap ,
Interest rate ceiling ,
Interest rate floor ,
In play ,
In-process research and development ,
Income risk ,
Index option ,
Interest rate option ,
I/O strip ,
Income replacement ratio ,
In-service withdrawal ,
IRA rollover ,
Idiosyncratic risk ,
Individual tax return ,
Imbalance of orders ,
In and out ,
Inside spread ,
In sympathy ,
In the tank ,
Jointly and severally ,
Jumping the gun ,
Joint and several liability ,
Joint and survivor annuity ,
Joint return ,
Joint tax return ,
Knock-out option ,
Last In First Out ,
Liquidity ratio ,
Lender of last resort ,
Law of one price ,
Limited risk ,
Lending at a rate ,
Limit-on-close order ,
Limit order ,
Limit order book ,
Limit order information system ,
Limit price ,
Law of demand ,
Law of supply ,
Limit down ,
Limit move ,
Limit up ,
Lock-limit ,
London International Financial Futures and Options Exchange ,
Limited company ,
London Inter-Bank Offer Rate ,
Letter of comment ,
Legal risk ,
Line of credit ,
Loan-value ratio ,
Lock-in ,
Load-adjusted return ,
Lapsed option ,
Listed option ,
Leading the market ,
Ladder strategy ,
Limited Liability Company ,
Locked in ,
Long-term gain or loss ,
Level I quotes ,
Low ,
Market conversion price ,
Maturity date ,
Mob spread ,
Maintenance call ,
Make a market ,
Margin call ,
Margin rate ,
Market if touched order ,
Market maker spread ,
Market on close order ,
Medium of exchange ,
Market rate ,
Money at call ,
Mortgage rate ,
Mortgage risk ,
Married put ,
Mid cap ,
Mill rate ,
Mean return ,
Market return ,
Maximum price fluctuation ,
Middle office ,
Master limited partnership ,
Negotiable certificate of deposit ,
Negotiable Order of Withdrawal ,
Nominal rate ,
Notice of Sale ,
National Association of Securities Dealers ,
National Association of Securities Dealers Automated Quotations system ,
National Securities Trade Association ,
Net capital ratio ,
No limit order ,
Non-equity option ,
Null and void ,
Notice of Default ,
Naked call ,
Naked option ,
Naked put ,
Near option ,
Neutral spread ,
Non-qualified stock option ,
Non-statutory stock option ,
National Association of Real Estate Investment Trusts ,
New high ,
Off-balance-sheet financing ,
Off the books ,
One time charge ,
Overhead ratio ,
Office of Thrift Supervision ,
Offering price ,
Out-of-favor ,
Over-the-Counter ,
Off-floor order ,
On-floor order ,
On margin ,
Option account ,
Or better ,
Operating rate ,
One-share one-vote rule ,
Option ,
Offering date ,
Opinion of title ,
On account ,
On-the-spot loan ,
Option income fund ,
Option chain ,
Option contract ,
Option holder ,
Option margin ,
Option pool ,
Option premium ,
Option price ,
Option pricing curve ,
Options Clearing Corporation ,
Option series ,
Option spread ,
Options Prices Reporting Authority ,
Option writer ,
Out of the money ,
Old age, survivors, and disability insurance ,
On-balance volume ,
Odd lot buy/sell ratio ,
Off-board ,
On close ,
One man picture ,
On open ,
On the opening ,
Open trade equity ,
Option exchange ,
Pooling of interests ,
Pre-depreciation profit ,
Pre-tax profit margin ,
Profit and loss statement ,
Pass-through coupon rate ,
Payment date ,
Payment-in-kind security ,
Price Value of a Basis Point ,
Provisional call feature ,
Put bond ,
Put provision ,
Payment for order flow ,
Public limited partnership ,
Payable date ,
Payout ratio ,
P&L ,
Provision for income taxes ,
Price index ,
Producer Price Index ,
Parity price ,
Price limit ,
Policy limit ,
Pre-existing conditions ,
Public offering price ,
Power of Attorney ,
Prepayment risk ,
Prime rate ,
Principal risk ,
Prioritization of debt ,
Projected maturity date ,
Prime rate fund ,
Pairs trade ,
Perpendicular spread ,
Physical option ,
Position limit ,
Price spread ,
Protective put ,
Protective put buying ,
Put ,
Put option ,
Put swaption ,
Put warrant ,
Paid-in capital ,
Paid-in surplus ,
Pre-syndicate bid ,
Private Investment in Public Equity ,
Preservation of capital ,
Put ratio backspread ,
Point-and-figure chart ,
Profit ratio ,
Painting the tape ,
Price range ,
Price-weighted index ,
Put/call ratio ,
Private limited partnership ,
Quality spread ,
Quick turn ,
Reports and Records ,
Retention rate ,
Return of capital ,
Return on Capital ,
Return on Invested Capital ,
Return on Total Assets ,
Reverse leverage ,
Risk adjusted return ,
Run rate ,
Real interest rate ,
Reserve ratio ,
Rate covenant ,
Redemption date ,
Redemption price ,
Return ,
Risk ,
Round lot ,
Reading the tape ,
Real-time trade reporting ,
Regulation D ,
Regulation G ,
Regulation T ,
Regulation U ,
Round of funding ,
Rules of Fair Practice ,
Rate of exchange ,
Reciprocal of European terms ,
Record date ,
Real economic growth rate ,
Retail Price Index ,
Round turn ,
Ratio ,
Reinvestment risk ,
Regulation A ,
Reverse acquisition ,
Reverse merger ,
Reverse Take-Over ,
Right of first refusal ,
Right of rescission ,
Rate-improvement ,
Rate lock ,
Renegotiable rate ,
Reverse-annuity mortgage ,
Reverse mortgage ,
Revolving line of credit ,
Right of recourse ,
Rule of 78 ,
Ratio calendar combination ,
Ratio calendar spread ,
Ratio spread ,
Ratio write ,
Registered options principal ,
Rent ,
Rent control ,
Right of redemption ,
Retirement Equity Act of 1984 ,
Roth IRA ,
Reverse split ,
Risk/return trade-off ,
Risk arbitrage ,
Risk-averse ,
Risk management ,
Risk neutral ,
Risk premium ,
Risk seeking ,
Ratio analysis ,
Return on Capital Employed ,
Rate of return ,
Real rate of return ,
Reverse repo ,
Reverse repurchase agreement ,
Resyndication limited partnership ,
Risk capital ,
Selling, General and Administrative Expenses ,
SG&A ,
Savings and Loan ,
Sight letter of credit ,
S&L ,
Securities and Exchange Commission ,
Series EE bond ,
Spot rate ,
Segregation of securities ,
Sell limit order ,
Sell the book ,
Stop-limit order ,
Stop price ,
Savings rate ,
Standard of living ,
Swap rate ,
Systemic risk ,
Settlement price ,
Spot price ,
Settlement options ,
Short interest ratio ,
Stock option ,
Stock option plan ,
Subscription price ,
Statute of Limitations ,
Sale and leaseback ,
Satisfaction of debt ,
Start rate ,
Staggered board of directors ,
Selling the spread ,
Single option ,
Spread option ,
Strike index ,
Synthetic put ,
Savings Incentive Match Plan for Employees ,
SIMPLE IRA ,
Simplified Employee Pension IRA ,
Spousal IRA ,
Share price ,
Split-adjusted price ,
Selling short against the box ,
Shorting against the box ,
Structured portfolio strategy ,
Swing trade ,
S Corporation ,
Short-term gain or loss ,
Standard mileage rate ,
Subchapter M ,
Subchapter S Corporation ,
Schedule C ,
Securities Act of 1933 ,
Securities Acts Amendments of 1975 ,
Securities Exchange Act of 1934 ,
Seek a market ,
Settlement date ,
S&P phenomenon ,
Spread ,
Stop and reverse ,
T-Bill ,
Trade ,
Take a position ,
Two-sided market ,
Two-way market ,
Total return ,
Trailing P/E ,
Trade barrier ,
Trade deficit ,
Trade surplus ,
Trade house ,
Total return index ,
Tenancy by the entirety ,
Teaser rate ,
TED spread ,
Truth in Lending ,
Two-step mortgage ,
Time spread ,
Tenancy at will ,
Top hat plan ,
The Street ,
Timing the market ,
Taxpayer Relief Act of 1997 ,
Tax Reform Act of 1986 ,
Tax Reform Act of 1993 ,
Tax return ,
Take a bath ,
Target price ,
Trade date ,
U.S. Government Agency Security ,
U.S. Savings Bond ,
U.S. Treasury ,
U.S. Treasury Bill ,
U.S. Treasury Bond ,
U.S. Treasury Note ,
U.S. Treasury Securities ,
Unlimited risk ,
Underwriting spread ,
Unemployment rate ,
Underlier ,
Uncovered call ,
Uncovered option ,
Uncovered put ,
Unsystematic risk ,
Unit of trade ,
Unit of trading ,
Variable rate ,
Variable ratio write ,
Vertical spread ,
Variable ratio plan ,
Venture capital limited partnership ,
Wage price spiral ,
World Trade Organization ,
Waiver of premium ,
Widow-and-orphan stock ,
W-2 Form ,
W formation ,
When, as, and if issued ,
When issued ,
X or XD ,
Year-To-Date ,
Yield spread ,
Yield to call ,
Y shares