Chapter 07 · Section 7.1

Short Butterfly Question 2

To put on the September 40-45-50 short butterfly, you:

a) buy the 40 and 45 strike and sell the 50 strike.
b) sell the 40 and 50 strike and buy two 45 strikes.
• c) buy the 40 and 50 strike and sell two 45 strikes.
  No.
  d) sell the 40 and 45 strikes and buy the 50 strike.