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Butterfly Spread
What does it mean?
An option strategy combining a bull and bear spread. It uses three strike prices. The lower two strike prices are used in the bull spread, and the higher strike price in the bear spread. Both puts and calls can be used.
In Other Words...
This strategy has limited risk and limited profit.
Related Links
Options Basics Tutorial - An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them.
Related Terms
Bear Spread | Bull Spread | Option
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