Long Put Butterfly Calculator

By Yojana Mandon · Updated June 2026 · 2 min read · Risk disclaimer

A long put butterfly buys one higher-strike put, sells two middle-strike puts, and buys one lower-strike put, all equally spaced. It is a defined-risk, low-cost bet that the stock will pin the middle strike at expiration. The payoff is a tent identical to the long call butterfly at the same strikes — maximum profit at the body, small loss (the debit) beyond the wings.

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Key characteristics

• Legs: long 1 higher put, short 2 middle puts, long 1 lower put (equal spacing).
• Maximum profit if the stock finishes at the middle strike at expiration.
• Maximum loss is limited to the small net debit paid.
• Same payoff as a long call butterfly at the same strikes — use whichever is cheaper.

When to use a long put butterfly

Use a long put butterfly when you expect a stock to sit near a specific price into expiration and want a cheap, defined-risk way to express it. The tent-shaped payoff pays off best if the stock lands right at the middle strike, and the cost — the net debit — is all you can lose.

It is a low-cost, low-probability, high-reward pin bet. Because it is built from puts, it can be more efficient than the call version when put strikes are better priced, but the economics are otherwise identical.

Risks and management

The trade needs the stock to be near the middle strike as expiration approaches; a move past either wing leaves only the small debit lost. The two breakevens are the lower strike plus the debit and the upper strike minus the debit.

Manage it by opening close to expiration when time decay works for the body, and by taking profits early rather than hoping for a perfect pin — the peak value is only realised right at expiration with the stock on the middle strike.

On the Greeks, the Long Put Butterfly is vega-negative — a fall in implied volatility (such as an earnings IV crush) works in your favour, and theta-positive, so time decay adds to the position each day it is held.

Managing the trade and common mistakes

A long put butterfly reaches its full theoretical value only in the last hours before expiration, when the underlying is pinned near the middle strike — so patience and realistic targets matter more than for most spreads. Experienced traders often take profit at 25 to 40 percent of the maximum, because the final chunk of value only materializes if price sits exactly at the body, which rarely happens on schedule. Theta works in your favour while the underlying hovers near the center, but gamma turns hostile as expiration nears: a small drift toward either wing can swing the mark sharply. If price threatens a wing, rolling the untested short strike toward the money, or simply closing the whole four-leg structure, is usually cleaner than legging out and leaving a naked short put behind.

The most common mistake is holding for the maximum payoff and watching a near-perfect setup evaporate when the underlying drifts off the body in the last day. A second error is treating this as a directional trade — it is a low-volatility, range-bound bet, and entering it before an earnings report or other catalyst usually guarantees the underlying blows through a wing. Watch the short middle strikes for early assignment risk around ex-dividend dates, since two short puts deep in-the-money can be exercised against you. Near expiration, pin risk at the body, widening bid-ask spreads, and thinning liquidity across four legs make exact fills difficult, so use limit orders on the full spread rather than legging in and eating slippage.

Calculate it live

Use the free OptionProfit Long Put 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.

Frequently asked questions

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