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Broken Wing Butterflies

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Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Broken wing butterflies are a low cost, defined risk trade that when structured correctly can make money even if we’re directionally incorrect.

Unlike symmetric butterflies, BWBs are entered for a credit and assume a small directional bias. BWBs can be constructed of either all calls or all puts, and the trade is comprised of two short options and a long option above and below the short strike.

Tune in as Tom and Tony walk through structuring BWBs in the tastyworks platform.

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