524 Long Butterfly Strategy: Buy lower strike option, sell 2 higher strike options, and buy a higher strike option with the same expiration date (all calls or all puts). Market Opportunity: Look for a range-bound market that is expected to stay between the breakeven points. Maximum Risk: Limited to the net debit paid. THE OPTIONS COURSE FIGURE Long Butterfly Spread Maximum Profit: Limited. (Difference between strikes – net debit) × 100. Profit exists between breakevens. Upside Breakeven: Highest strike – net debit. Downside Breakeven: Lowest strike + net debit. Long Condor Strategy: Buy lower strike option, sell higher strike option, sell an even higher strike option, and. | 524 THE OPTIONS COURSE Long Butterfly Strategy Buy lower strike option sell 2 higher strike options and buy a higher strike option with the same expiration date all calls or all puts . Market Opportunity Look for a range-bound market that is expected to stay between the breakeven points. Maximum Risk Limited to the net debit paid. FIGURE Long Butterfly Spread Maximum Profit Limited. Difference between strikes - net debit X 100. Profit exists between breakevens. Upside Breakeven Highest strike - net debit. Downside Breakeven Lowest strike net debit. Long Condor Strategy Buy lower strike option sell higher strike option sell an even higher strike option and buy an even higher strike option with the same expiration date all calls or all puts . Market Opportunity Look for a rangebound market that is expected to stay between the breakeven points. Maximum Risk Limited to the net debit paid. FIGURE Long Condor Spread Maximum Profit Limited. Difference between strikes - net debit X 100. Profit exists between breakevens. Upside Breakeven Highest strike - net debit. Downside Breakeven Lowest strike net debit. Strategy Reviews 525 Long Iron Butterfly Strategy Buy a higher strike call sell a lower strike call sell a higher strike put and buy a lower strike put with the same expiration date. Market Opportunity Look for a range-bound market that you anticipate to stay between the breakeven points. Maximum Risk Limited. Difference between strikes X 100 - net credit. FIGURE Long Iron Butterfly Spread Maximum Profit Limited to the net credit received. Profit occurs between the breakevens. Upside Breakeven Strike price of middle short call net credit. Downside Breakeven Strike price of middle short put - net credit. Calendar Spread Strategy Sell a short-term option and buy a long-term option using at-the-money options with as small a net debit as possible use all calls or all puts . Calls can be used for a more bullish bias and puts can be used for a more bearish .
