butterfly spread

Definition of "butterfly spread"
  1. An options strategy involving three different contracts with the same expiration date but varying strike prices
How to use "butterfly spread" in a sentence
  1. The broker chose to use a butterfly spread to limit the potential loss.
  2. In anticipation of a volatile market, she set up a butterfly spread.
  3. First-time traders often practice setting up a butterfly spread to understand the dynamics of the options market.

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