The short call butterfly options spread anticipates volatility to rise and the underlying security to move significantly in either direction. The short call butterfly option strategy involves selling a call option, buying 2 call options and selling a call option all at equidistant upper strike prices.

The short call butterfly strategy is a combination of a bear call and a bull call spread. Maximum profit is the difference between the premium received for the short calls minus the premium paid for the long calls (Net Credit). Maximum loss is the difference between the center and outer strike values minus the Net Credit.

The short call butterfly strategy succeeds if the underlying security breaks through the range, trading below the downside breakeven (lower strike + Net Credit) or above the upside breakeven (upper strike - Net Credit) at expiration. Maximum profit is achieved if the underlying security is outside either of the outer strike prices at expiration.