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Last Updated: 9:15 AM 09 APR

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Watch here, How to use Butterfly?

What is the Butterfly Strategy?

The Butterfly Strategy is an options trading strategy that involves buying or selling multiple options contracts with the same expiration date but different strike prices. It aims to profit from limited price movement in the underlying asset, with maximum gains at the middle strike price and limited risk.

Interpretation of Butterfly

A butterfly is a common options trading strategy that involves the combination of buying or selling multiple options contracts with different strike prices but the same expiration date. The butterfly strategy is typically implemented using either all-call options or all-put options.
On the Talkoptions website, traders can able to see the readymade butterfly combinations with Maximum reward and maximum risk involved in the butterfly along with Breakeven levels of Index/Stock.
3 to 4 readymade butterfly option combinations will be shown by which traders can take the trade with the help of this feature,
Traders can manually choose the Butterfly Type such as Long Call, Long Put, Short Call and Short Put, If Trader chooses Long Call, then the website automatically makes a readymade butterfly Long Call combination which includes 2 buy legs and 1 sell leg.
If Trader chooses Short Call, then the website automatically makes a readymade butterfly Short Call combination which includes 2 sell legs and 1 buy leg. Traders can choose the Strike gap between the legs and the No. of combinations also traders can select.
This is the best feature who don't want to waste your time selecting strikes and making butterfly strategies. TalkOptions' will provide you with more than 10 combinations of Butterfly strategy. Traders have the choice to select any one of them and take advantage of it.

How to add Position in Portfolio?

Here's how it works:

  • Traders can select the Index/Stock, expiry date, and Butterfly type such as Long call or long Put and select the strike price.
  • Click on the "Portfolio" button positioned here.
  • A user-friendly pop-up window will appear, inviting you to assign a name to your strategy. Once you've done that, simply hit the "Save Strategy" button at the bottom.
  • If you wish to increase the number of lots, you can do so by adjusting the lot value.

With a single click on the suitcase icon above, you can track your strategy's performance in the Live Market. Traders can see the Option Greeks as well. They can see Greek values in Rupees or in Decimal format by just sliding the option that is given.
If you want to Analyze your strategy click on the Strategy box that you saved, and you will find the (Analyze) button, When you click on that you will be redirected to the Strategy Builder page where you can analyze your trades and able to make any adjustments if required.
If a trader wants to Edit the strategy by closing one leg, then he can choose Edit Option, One pop-up window will open where he can manually fill in the Exit Price and click on the Update Strategy below.
If you want to delete that strategy Click on the Delete button.

Real-time updates on your Profit and Loss

In essence, the "Add to Portfolio" feature empowers you to execute and monitor trading strategies seamlessly. It's designed to simplify complex concepts, making them accessible to even those new to trading. So, if you're ready to take your trading journey up a notch, dive into the world of strategies with confidence using this game-changing tool.