Long butterfly is a way to realize profit if implied volatility is too high. A long butterfly in calls consists of long positions of single call options with (X+A) and (X-A) strikes and a short position of two calls of strike X, all calls having the same expiry.
Want to learn more? Download now an interactive reference application for iPhone.
The screenshot shows the following portfolio:
European call struck at 9.000 with expiry in 30 days
European call struck at 10.000 with expiry in 30 days
European call struck at 11.000 with expiry in 30 days
This is an excerpt from iOptioneer option trading reference application. In order to build the real-time dynamic strategy graph and run simulations you will need to download the application from App Store.