Applies to derivative products. Complex option strategy that involves buying a call option with a relatively low strike price; buying a call option with a relatively high strike price; and selling two [..]

An option strategy that combines two bull or bear spreads and has three exercise prices.Related Terms: Bear spread Bull spread 

A strategy involving three strike prices with both limited risk and limited profit potential. Establish a long call butterfly by buying one call at the lowest strike price, writing two calls at the mi [..]

An option strategy involving the simultaneous sale of an at the money straddle and purchase of an out of the money strangle. Potential gains will be seen if the underlying instrument on which the option is based remains stable, while the risk is limited should the underlying instrument move dramatically.

Definition An options strategy built on four trades at one expiration date and three different strike prices. For call options, one option each at the high and low strike price are bought, and two opt [..]

The placing of two inter-delivery spreads in opposite directions with the center delivery month common to both spreads.

A three-legged spread in futures or options. In the option spread, the options have the same expiration date but differ in strike prices. For example, a butterfly spread in soybean call options might [..]

An option position composed of either all calls or all puts (with the exception of an iron butterfly), with long options and short options at three different strikes. The options are all on the same stock and of the same expiration, with the quantity of long options and the quantity of short options netting to zero. The strikes are equidistant from [..]

a strategy is binary options trading combines bear and bull spreads.

Established by buying an at-the-money option, selling 2 out-of-the money options, and buying an out-of-the money option. A butterfly is entered anytime a credit can be received; i.e., the premiums rec [..]

The sale of two options with the same exercise price, together with the purchase of one option with a lower exercise price and one option with a higher exercise price. All options must be of the same type, have the same underlying contract, and expire at the same time, and there must be an equal increment between exercise prices.

a 3-strike price spread that profits from the underlying expiring at a specific price

Applies to derivative products. Complex option strategy that involves buying a call option with a relatively low strike price; buying a call option with a relatively high strike price; and selling two [..]