neutral strategy LONG CALL BUTTERFLY

Example: Sell 2 calls;
buy 1 call at next lower strike;
buy 1 call at next higher strike
(the strikes are equidistant)
Market Outlook: Neutral around
strike
Risk: Limited
Reward: Limited
Increase in Volatility:
Typically hurts position
Time Erosion: Typically helps position
BEP: Two BEPs
1. Lower long call strike plus
net premium paid
2. Higher long call strike minus
net premium paid