# Broken Wing Butterfly

> Which side can you genuinely rule the big loss out on?

| Property | Value |
| --- | --- |
| Market phase | Range-bound, no trend, price oscillating between levels, Basing out, or a quiet upward drift, Topping out, or a quiet downward drift |
| Driver | Theta - you get paid because time passes and premium decays, Delta - you get paid because price moves your way |
| Direction | neutral with a directional tilt |
| Max profit | narrow width minus the debit, or narrow width plus the credit, at the middle strike |
| Max loss | (the width of the wide wing minus the width of the narrow wing) minus the credit received |
| Risk defined | Yes |
| Legs | +1 Call @K_low; -2 Call @K; +1 Call @K_high (unequal wing width) |
| Approval level | 3 (Defined-risk spreads) |
| Experience | Advanced |

## Formulas

```text
Break-even: construction-dependent - must be simulated
Max profit: narrow width minus the debit, or narrow width plus the credit, at the middle strike
Max loss: (W_breit - W_eng) - C
```

## Legs

1. +1 Call @K_low
2. -2 Call @K
3. +1 Call @K_high (unequal wing width)

[Read this strategy on the web](https://www.mindtrajour.com/en/academy/strategies/broken-wing-butterfly)