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Modified Put Butterfly

Description
	The Modified Put Butterfly is identical to the Long Put Butterfly with the exception
	that the distance between the middle and higher strike calls is closer than that of the
	lower and middle strikes. The Modified Put Butterfly is virtually identical to the
	Modified Call Butterfly.
	The net effect of this is that the position changes to a rangebound strategy with a
	bullish bias. As such, we make our biggest profits if the stock remains around the
	middle strike, but we can still make a profit if the stock breaks to the upside.
	This is a fiddly strategy and should only be used if you have an analyzer handy;
	otherwise, it would be easy to miscalculate your risk profile. But in terms of its
	usefulness, the Modified Butterfly is extremely useful for butterfly enthusiasts who
	need some flexibility.
	The Modified Put Butterfly involves a low strike long put, two ATM short puts,
	and an OTM long put. The resulting position is profitable in the event of rangebound
	or rising action by the stock. Although the risk/reward ratio is attractive, the prob-
	lem remains that the maximum reward is restricted to the scenario where the stock
	is at the middle strike at expiration.	

P/L Profile

       
	



 
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