Short Put 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 put 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 put fly strategy combines a bull put spread with a bear put spread, where the inside strike is purchased twice between evenly spaced outside strikes.
Fri, Jan 15th, 2021