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Call Broken-wing Butterfly

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A Call Broken-wing Butterfly is a

defined risk strategy

set up like a normal

Call Butterfly

however, the highest

Strike

is placed farther from the

Short Options

than the lower strike. The purpose of this action is to eliminate risk to the downside. You could also think of a call BWB as a defined risk

call ratio.

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Disclaimer: By accessing Food for Theta and its services you agree to be bound by the Terms of Use & User Agreement. The information discussed at Food for Theta is based upon the personal experience, theories, and opinions of the author (De’Shan Perry), and is intended for educational and entertainment purposes only. Neither Food for Theta nor the author, De'Shan Perry, are licensed financial or investment advisors. Nothing posted on Food for Theta is intended to be, nor should it be considered financial or investment advice or a recommendation. It is up to each individual reader to personally assess the merits and accuracy of the information provided on Food for Theta. Food for Theta has no professional affiliation with any financial service or brokerage firm. Food for Theta does not endorse any particular tradable entity, underlying, or security and does not transact trades or facilitate markets. Trading requires financial risk and may not be suitable for everyone. Please consider the information provided in Characteristics and Risks of Standardized Options before deciding to invest with options.

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Call Broken-wing Butterfly

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