Butterfly Spread (Call or Put)

### What is a Butterfly Spread? This is the low-cost, high-reward-ratio play for a trader with a real conviction on where a stock will settle. You buy one option below your target, sell two at your target (the center strike), and buy one above it. Structured with either all calls or all puts, the payoff looks identical either way. The appeal is the reward-to-risk math — you're risking a small, defined premium for a potentially large payout if the stock pins near your center strike. The catch, same as with the bullish butterfly, is that the sweet spot is genuinely narrow — this rewards precision, not just a general directional hunch.