A short call butterfly consists of two long calls at a middle strike and a short one call each at a lower and upper strike. The upper and lower strikes (wings) must both be equidistant from the middle strike (body), and all the options must have the same expiration date.
The strategy is hoping to capture a movement outside of the wings at the expiration of the options.
This strategy tends to be successful if the underlying stock is outside the wings of the butterfly at expiration.
The investor is attempting to correctly predict an upcoming move in either direction, usually for a limited debit, if any.
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