Trading SystemJoker Trading System : Options : prevnext Butterfly Spread


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Butterfly Spreads

When listed options were first traded, the premiums were so fat that you could put on butterflies for a credit. Thus, if you put on the 25-30-35 butterfly in a stock for, say, a 1/4 credit 1000 times, the worst you could do at expiration was make $25,000; the best, $500,000. Believe it or not, not everyone recognized this offer of free money.