Strategy - LONG BUTTERFLY (details below)

• bullish
• bearish
• neutral
  • expect prices to fluctuate in very narrow range
  • prices might flutuate in a broader range
  • moderately certain that prices will not flutuate much
  • short-term weakness but longer term rally
  • hold stock but expect no movement
• volatile

Strategy Implementation
Call option with low strike b bought and 2 call options with medium strike a sold and call option with high strike c bought. (The same position can be created with puts, but is less common).

Upside Potential
Limited - to the difference between the lower and middle strikes minus the net debit of establishing the spread.

Downside Risk
Limited to the initial net debit of establishing the spread.

Margin
Margin should be possible.

Comment
Can be difficult to execute such strategies quickly.