Butterfly
A three-strike options strategy that profits when the underlying stays near the middle strike at expiration.
Explanation
A long butterfly involves buying one lower-strike option, selling two middle-strike options, and buying one higher-strike option. It is a limited-risk, limited-reward strategy with maximum profit at the center strike. It can be built with all calls, all puts, or a combination (iron butterfly).
Example
Buy 1x 95 call, sell 2x 100 calls, buy 1x 105 call for a net debit of $0.80. Max profit is $4.20 if the stock closes at exactly $100 at expiration.