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What Is a Butterfly Spread?

By Matthew Frankel, CFP – Updated Apr 17, 2025 at 12:12AM

Key Points

  • Butterfly spreads use specific option combos to bet on stock volatility levels.
  • Long butterfly spreads profit if the stock price hits the middle strike at expiration.
  • Short butterfly spreads gain most if stock hits extremes, not the middle option price.
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