Butterfly Spread
A butterfly spread is a limited-risk options strategy built around a target price. It combines three strikes to create a defined-risk, defined-reward position.
Defined Risk. Defined Opportunity.
Long call butterfly — capped risk, capped reward, built around a target price.
Illustrative example — not live market data.
Manual Market — Go Beyond a Single Expiration
Manual Market lets you set expiration dates independently for each leg and model positions with your own inputs — without depending on OptionLab's built-in US or Israel market data. Explore more advanced positions shaped by both price and time.
Related Strategies
How It Works
A butterfly spread uses three strikes with the same expiration. Built with calls, a long call butterfly buys one lower-strike call, sells two middle-strike calls, and buys one higher-strike call. The same basic payoff can also be built using puts, as a long put butterfly.
Because every leg is bought or sold at the same time, both the maximum profit and the maximum loss are defined from the start. Profit is highest around the middle strike at expiration, and shrinks as the underlying moves away from that target area. A butterfly spread also has two breakeven points — one below and one above the middle strike.
Build a Butterfly Spread in OptionLab
Build a Butterfly Spread leg by leg in OptionLab by selecting the strikes and contracts you want to analyze. OptionLab shows you the payoff graph, breakeven points, and maximum profit and maximum loss as soon as your legs are in place.
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