Options / Long call butterfly
Payoff at expiry for a generic example with the stock at 100. Green is profit, red is loss, dashed lines are break-even prices.
You buy one lower call, sell two middle calls and buy one higher call. The cost is small and the best result comes if the stock finishes at the middle strike.
When it is used: When you expect the stock to land near a specific price at expiry.
Main risk: You lose the net cost if the stock finishes outside the outer strikes. Four option legs mean higher trading costs.
- Net cost
- $80 per contract
- Max gain
- +$420
- Max loss
- -$80
- Break-even
- 95.8 / 104.2
- Legs
- 3
The legs in this example
| Action | Contract | Strike | Example price |
|---|---|---|---|
| Buy | 1 call | strike 95 | $7.00 per share |
| Sell | 2 calls | strike 100 | $4.00 per share |
| Buy | 1 call | strike 105 | $1.80 per share |
Research that fits this view
Our latest Hold-rated company research, for readers who want to see the thinking behind a neutral view. This is a link to research, not a trade idea.
- HALO: Hold-rated research (published 2026-11-03)
- MNDY: Hold-rated research (published 2026-11-03)
- WLDN: Hold-rated research (published 2026-11-03)
Results for this strategy
We track our own hypothetical examples privately and publish each result at least 30 days after the play has closed, wins and losses together, once there are enough closed plays to say something. None have closed yet. This table will list every closed play with its expiry result and a link to the research it came from.
Back to all option strategies · How we track results