Put Broken Wing Butterfly Calculator
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.
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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.
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.
- A skewed put butterfly, usually opened for a credit.
- No risk to the upside — you keep the credit if the stock rises.
- Larger but defined downside risk, capped by the far long put.
- A neutral-to-bearish, defined-risk income structure.
SPY, QQQ, IWM, NVDA, AMD, NFLX, INTC, MU, CRM, COIN, PYPL, JPM, BAC, BA
Frequently asked questions
Why open it for a credit?
Skewing the lower wing further out lets the two short puts bring in more than the two longs cost, so you often collect a credit and eliminate the upside risk entirely.
Where is my maximum loss?
On the downside, in a zone around the short strikes, but capped by the far long put — so the risk is defined, just larger than the credit received.
How is it different from a standard put butterfly?
A standard butterfly has equal wings and a debit; the broken wing widens one wing to remove risk on one side, usually for a credit, at the cost of a larger defined loss on the other.
Credit vs Debit SpreadsTheta Decay & Selling PremiumVolatility Skew and the Volatility Smile
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