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Strategies & Market Trends : Advanced Option Strategies
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To: AurumRabosa who wrote (199)9/8/1998 10:18:00 PM
From: ringo99  Read Replies (3) of 355
 
Can you explain how these work. How can you make money on this butterfly. The way I figure it is the butterfly will negate the wings for a negative gain. Please tell me if I'm missing something here...

ie

buy 1 - 105 call @ 9.25 = 925.00-
sell 2- 110 calls @ 6.75 = 1350.00+
buy 1 115 call @ 4.50 = 450.00-
================ ------- -------
NET 1375.00- 1350.00+ 25.00-
======== ======== ======

if stock ends at 125 for example, call worth
105 call = 20 x 100 = 2000+
110 calls = 15 x 200 = 3000-
115 call = 10 x 100 = 1000+
========================= ------ ------
3000+ 3000- 0.00
======== ====== ======
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