Long Call Butterfly
In plain English
A cheap, precise bet that the price lands on a specific level. You buy one lower call, sell two in the middle, and buy one higher. It costs little and pays well if the price pins the middle strike at expiry.
How it's built
Buy 1 ITM, sell 2 ATM, buy 1 OTM call — a cheap, defined-risk bet that the price pins the middle strike.
Illustrative payoff at expiry on a NIFTY-like underlying (spot 24,000, 7d, 13% IV). The shape is the point — open it in the Strategy Lab to tune spot, time and volatility live.
Max profit₹5,904
Max loss₹596
Net premiumDr ₹596
Breakevens23,909 / 24,091
When to use it
A strong view the price expires near a specific level. Very cheap, low-probability/high-payoff.
Max profit
At the middle strike: (wing width − net debit).
Max loss
Limited to the small net debit.
Common mistakes
- Expecting it to pay off before expiry (value concentrates at expiry).