A broken wing butterfly is a butterfly with one wing moved further out. Shifting the wing cheapens the trade — often to a net credit — which removes the loss on that side, at the cost of a larger loss on the other.
Open the Broken Wing Butterfly calculator →Use it when you expect the stock to drift toward a target but want a cheaper, lower-risk version of a butterfly — ideally one that costs nothing or pays a small credit to put on.
It is popular as a directional-neutral income trade because the credit version cannot lose on one side, so a wrong-way move in that direction is harmless.
Like a standard butterfly, profit peaks if the stock pins the body strike at expiration. By skipping the far wing, you reduce the cost (or collect a credit), which flattens the payoff to zero on that side.
The trade-off: the near side now has a wider gap, so the maximum loss there is larger than a symmetric butterfly would have.
Use the free OptionProfit Broken Wing Butterfly calculator to load a live option chain, build the trade, and instantly see the payoff chart, breakevens, probability of profit, Greeks and a Monte Carlo simulation of outcomes.
A credit means you cannot lose on the skipped-wing side — a wrong-way move there simply leaves you keeping the credit, which is why traders prefer it over a debit butterfly.
On the side where you did NOT widen the wing. That gap is larger than a symmetric butterfly, so the maximum loss there is bigger.
Yes — all four legs are long or short options with capped payoffs, so the maximum loss is known when you open it.
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