Butterfly spread - Financial definition
Financial acronyms
The entire acronym collection of this site is now also available offline with this new app for iPhone and iPad.
Concise definition of the term butterfly spread
The butterfly spread is a non-directional option strategy designed to draw a limited but highly probable profit, if the future volatility of the underlying is below (long butterfly) or above (short butterfly) the implied volatility. Butterfly spreads have a low probability of loss.