Get a deeper understanding of options strategy with combined scenarios

Views 5412 Jun 27, 2024

Buy Call options on a butterfly spread: A case study of AMZN.

Today, let's learn about the Long Call Butterfly, a buy options trading strategy with a spread.
The strategy has limited profit and loss. If the stock price moves within a certain range, the strategy can make a profit.

Let's take a look at the expiration profit and loss chart of this strategy. Does it look like a butterfly to you? That's why it's called Long Call Butterfly.
This is also the reason why it is named Long Call Butterfly, a buy options trading strategy with a spread.

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Next, let's take a look at how to use this strategy in practical trading with AMZN as an example.

If you want to learn more about practical options trading education, please follow 'Futu Options Sir' to get the latest updates! Click on the image below to follow quickly!

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After understanding the strategy introduction, let's start the case analysis.
(Disclaimer: This article is for reference only. All strategy analysis data mentioned below are fictional, and no specific investment strategy is recommended or constitutes investment advice.)

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Next, we will discuss profit and loss scenarios in three situations.
(Disclaimer: All profit and loss data mentioned below are based on the theoretical expiration situation and do not include trading costs. In actual trading, both expiration and closing out early are possible, and actual profit and loss will vary depending on your trading behavior.)

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Regarding this strategy, there are some minor variations that may not apply to all symbols, which should be used as a reference.

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That's it for today's options trading strategy share. If you want to learn more about practical options trading education, please follow 'Futu Options Sir' to get the latest updates! Click on the image below to follow quickly!

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Risk Disclaimer

This article is for reference and education only and does not recommend any specific investment strategy. The content is general and strictly for educational purposes and may not be suitable for all investors. The above content does not take into account an individual's financial situation, investment objectives, investment timeframe, or risk tolerance. Before making any investment decisions, you should consider your personal situation and related risks.
Any examples provided in this article are for illustrative purposes only and are not intended to reflect any expected investment results that investors can achieve. Options trading involves significant risks and may not be suitable for all investors. Before participating in any options trading and implementing any options trading strategies, investors must consider the characteristics and risks of options trading and consult professional investment advisors when needed.

Disclaimer: The above content does not constitute any act of financial product marketing, investment offer, or financial advice. Before making any investment decision, investors should consider the risk factors related to investment products based on their own circumstances and consult professional investment advisors where necessary.

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