Strategy Overview
Medium RiskExpertNeutralBullishBearish
A skip strike butterfly is a butterfly spread where one wing skips a strike, creating an asymmetric payoff. This gives a wider profit zone and directional bias.
Max Profit
Width of narrow side - debit paid
Max Loss
Debit paid (narrow side) or debit + extra width (wide side)
Breakeven
Varies with strike placement
Probability
~30% win rate
hist. est.
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Example Setup Calculator
$
Debit Paid
$200
Max Profit
$300
Max Loss
$200
Breakeven
$102.00
Strategy Components
BUY ITM CALL
Buy 1 lower strike
SELL ATM CALL
Sell 2 middle strikes
BUY OTM CALL
Buy 1 upper strike (skip one)
When to Use
- You want butterfly-like payoff with directional bias
- You have a price target range rather than exact target
- You want wider profitable zone
- Low cost entry for defined risk
Best Market Conditions
- Price target range identified
- Low volatility expected
- Want asymmetric risk/reward
Best Practices
- Skip strike on the side you expect movement
- Use near expiration for maximum decay benefit
- Place body at expected price
- Low cost, low probability play
Ready to Trade?
Review Skip Strike Butterfly and practice it in paper trading with the school workflow.
Paper Trading