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Broken-Wing Butterfly
neutral Capped lossAdvanced: a butterfly skewed to remove risk on one side, often for a credit.
When to use it
A butterfly with one wider wing — can be opened for a credit so one side has no risk. Neutral-to-directional. Defined risk.
Max profit
Near the body strike at expiry.
Max loss
The wider wing minus any credit.
Payoff at expiry
illustrative shape — not to scale
■ profit zone
■ loss zone
X axis = stock price at expiry →
How it's built
Strikes shown low→high. Sell = collect premium · Buy = pay premium for protection or upside.
This structure has an open-ended or multi-expiration payoff that our backtester
can't model honestly (it would report unrealistic win rates and zero drawdown), so we teach it with concrete
strikes and a real max-loss figure rather than publish unreliable backtest numbers.
Open any ticker's trade cockpit and pick this strategy to see specific strikes, max loss, and max profit.