Put Christmas Tree Butterfly Calculator
A put christmas tree butterfly is a skewed, budget butterfly: long one put near the money, short three puts a couple of strikes lower, and long two puts one strike lower still. The uneven quantities create a cheaper, bearish-leaning tent whose profit zone sits below the current price. It is the put-side twin of the call christmas tree butterfly, with defined risk.
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Key characteristics
- Legs: long 1 near put, short 3 lower puts, long 2 still-lower puts (balanced net quantity).
- A cheaper, skewed butterfly with a profit zone below the current price.
- Defined risk — the long puts cap the three short puts.
- A neutral-to-bearish lean; the put-side twin of the call christmas tree.
When to use a put christmas tree butterfly
Use a put christmas tree butterfly when you lean mildly bearish and want a cheaper alternative to a standard butterfly, with the profit zone positioned below spot. The unequal legs lower the cost and shift the payoff toward a modest decline.
It is an efficient way to target a downside drift into a specific area without paying full butterfly price. The balanced quantities (one long, three short, two long) keep the total contracts matched so the risk stays defined.
Risks and management
The trade profits if the stock eases into the zone around the short strikes and loses its (limited) cost if the stock moves too far in either direction. Because the structure is skewed, the payoff is asymmetric — read the exact breakevens and peak off the chart.
Manage it by aligning the short strikes with your downside target, taking profits as the stock settles into the zone, and remembering the maximum value is realised at expiration. Keep size aligned to the defined maximum loss.
On the Greeks, the Put Christmas Tree 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 Christmas Tree 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, cheaper butterfly built from puts (1 long, 3 short, 2 long).
- Profit zone sits below the current price — a bearish lean.
- Defined risk; the long puts cap the three shorts.
- The put-side twin of the call christmas tree butterfly.
SPY, QQQ, IWM, NVDA, AMD, NFLX, INTC, MU, CRM, COIN, PYPL, JPM, BAC, BA
Frequently asked questions
Why the unequal number of contracts?
The 1–3–2 structure (long, short, long) keeps the net quantity balanced while skewing the strikes, which lowers the cost and shifts the profit zone below spot.
Is the risk defined?
Yes. The long puts cover the three short puts, so the maximum loss is limited and known when you open the trade.
How does it differ from a standard put butterfly?
A standard butterfly is symmetric (1–2–1). The christmas tree uses uneven strikes and quantities to cut the cost and lean the payoff in one direction.
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