Long butterfly spread with calls is a complex options trading strategy that involves buying and holding three different call options at different strike prices. This strategy is used when an investor expects the price of the underlying asset to remain stable in the near term.
Key points:
– Involves buying one call option with a low strike price, selling two call options with a higher strike price, and buying one call option with an even higher strike price.
– The goal is to profit from a narrow trading range in the underlying asset.
– Limited risk, limited reward strategy.
– Requires precise timing and market analysis.
Overall, the long butterfly spread with calls can be a useful strategy for traders who are looking to capitalize on a stagnant market environment. It is important to carefully consider the risks and rewards associated with this strategy before implementing it in your own trading portfolio.