Long Call Butterfly Calculator
neutralA long call butterfly is a three-leg debit spread: buy one lower call, sell two middle calls, buy one higher call. Max profit occurs if the stock pins at the middle strike at expiration.
Max Profit
(Width of wing − Net debit) × 100
Max Loss
Net debit paid × 100
Break Even
Lower strike + Net debit / Upper strike − Net debit
When to Use a Long Call Butterfly
- You expect the stock to pin near a specific price at expiration
- You want very high reward-to-risk (often 3:1 or better)
- You have a strong directional thesis about where the stock will land
- Low-cost way to bet on a pin
Risks
- Very narrow max-profit zone — pinning is unlikely
- Time decay hurts until the final days before expiration
- The stock must stay very close to the center strike to profit significantly
How a Long Call Butterfly Works
Buy 1 call at strike A, sell 2 calls at strike B, buy 1 call at strike C (A < B < C, equal width). The result is a tent-shaped payoff with max profit at the center strike.
Example
AAPL at $195. Buy the $190 call for $6.60, sell 2x $195 calls for $3.60 each, buy the $200 call for $1.80. Net debit: $1.20 ($120).
Key Takeaway
Butterflies are high-reward, low-cost lottery tickets. The R/R is excellent but the probability of max profit is low. Best used when you have a strong pin thesis.