A butterfly is an options spread that is simply a combination of two vertical call or put spreads.  How do you analyze the profit and loss ramification as the underlying stock moves up or down and we approach expiration?

See how we do this by clicking the video below.

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about the author:

Scott Bauer

A respected market commentator seen on Bloomberg, Fox Business, CNBC and other major financial networks, Scott Bauer has 25 plus years of professional equity and index options experience at the Chicago Board Options Exchange (CBOE) and Chicago Mercantile Exchange (CME) and as a Vice-President/trader for Goldman Sachs. Scott graduated with Honors from the University of Illinois Business School and has taught classes both at his alma mater and at the CBOE.

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