# Butterfly spread (also referred to in German)

- Canonical URL: https://www.gerhardmerk.de/butterfly-spread-also-referred-to-in-german
- Post ID: 588729
- Modified: 2023-07-25T20:58:53+00:00
- Language: en

## Definition

Option position expressing a certain caution, consisting of a total of four contracts with the same expiration date and thereby - the purchase of an option with a low exercise price (strike price), - the sale of two options with medium strike prices and - the purchase of an option with a higher strike price. - Thus, two calls (call options) are bought at two different strike prices on one date. In addition, two calls are sold at a price that lies between the two purchased calls. In this way, any loss can normally be kept within relatively narrow limits. - See Bull Spread, Call, Option, Commodity Forward Contract, Stella Transaction, Straddle, Strangle. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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