Put Broken Wing Butterfly Calculator

By Yojana Mandon · Updated June 2026 · 3 min read · Risk disclaimer

A put broken wing butterfly is a put butterfly with the lower wing pushed further out, skewing the risk to one side. It is long one near put, short two middle puts, and long one far lower put. Widening the lower wing often turns the trade into a net credit that carries no risk to the upside — you keep the credit if the stock rises — in exchange for a larger, but still defined, maximum loss on the downside.

⧉ Embed this free calculator on your site →

Key characteristics

• Legs: long 1 near put, short 2 middle puts, long 1 far lower put (unequal wings).
• Often opened for a net credit, removing risk on the upside entirely.
• The far long put caps the downside, so the maximum loss stays defined.
• A bearish-leaning, defined-risk twin of the call broken wing butterfly.

When to use a put broken wing butterfly

Open a put broken wing butterfly when you are neutral to mildly bearish and want a butterfly that does not lose money if you are wrong to the upside. By skewing the wings for a credit, you remove the upside risk — the stock rising simply lets you keep the premium.

It is a favourite income structure: defined risk, a directional lean toward a modest decline, and no debit to recover. Traders place the body where they expect the stock to drift.

Risks and management

The cost of the free upside is a larger maximum loss on the downside, concentrated in a zone around the short strikes — though the far long put still caps it. The exact profit zone and loss sit between the strikes and are best read off the payoff chart.

Manage it by choosing a body strike aligned with your target, sizing for the (defined) maximum loss rather than the credit, and taking profits as the stock settles near the body. Skew and strike spacing drive whether it opens for a credit.

On the Greeks, the Put Broken Wing 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

With a put broken wing butterfly, the whole structure is deliberately lopsided: one wing is wider than the other, so the position often opens for a credit or with no risk on the far upside, while the wider downside wing carries the real, larger loss. Because it is built from puts, the peak payoff only appears very close to expiration, when the underlying sits near the short strikes and the tent has fully formed — so patient management matters more than chasing a target early. Realistic traders take 50 to 75 percent of the maximum theoretical profit and close, rather than holding for the last fragment. Theta works in your favor while price hovers over the body, but gamma turns sharp in the final days: a modest drop toward the wide wing can swing the trade quickly. If the underlying falls toward the threatened lower strikes, rolling the wide wing down or out, or simply closing the whole structure, is usually cleaner than legging out, since a partial unwind can briefly leave a naked short put. Cutting the trade is the right call once price breaks decisively into the wide side and the downside risk is no longer theoretical.

The most common mistake is treating the opening credit as if the trade were risk-free. Because there is little or no risk on the upside, beginners assume the position is safe everywhere — but the wider downside wing can produce a loss that dwarfs the premium collected if the underlying breaks hard through the short strikes. A second error is holding into expiration to squeeze out the final theta while gamma is whipping the short strikes around; a small move then flips a winner into a loser. Expiration-side hazards are real here: the short puts can face early assignment if they go deep in-the-money late in the cycle, and pin risk arises when the underlying settles right at a short strike, leaving you unsure whether you will be assigned. Liquidity also thins near expiry, and four legs at non-standard strikes tend to show wide bid-ask spreads, so filling with separate orders invites slippage — experienced traders use a single limit order for the full spread and size the position for the wide wing, not the credit.

Calculate it live

Use the free OptionProfit Put 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.

Frequently asked questions

Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss. Privacy Policy · Terms & Conditions.