Short Call Butterfly
A butterfly (fly) consists of options at three equally spaced exercise prices, where are all options are of the same type (all put or all call) and expire at the same time. In a short call fly, the outside strikes are sold the inside strike is purchased. The ratio of a fly is always 1 x 2 x 1. The short call fly strategy combines a bear call spread with a bull call spread, where the inside strike is purchased twice between evenly spaced outside strikes.
Fri, Jan 15th, 2021