what is butterfly straddle ?

A butterfly straddle is a complex options trading strategy that involves buying a call option and a put option at a specific strike price, and also selling two call options and two put options at higher and lower strike prices. The goal of a butterfly straddle is to profit from significant price movements in either direction, while also limiting the potential for losses.

The butterfly straddle is a variant of the straddle strategy and is often used when a trader expects the price of the underlying asset to move significantly, but is unsure of the direction. The strategy involves taking both long and short positions in options, which can result in a profit if the price of the underlying asset moves significantly in either direction.

However, it's important to note that the butterfly straddle strategy is complex and involves a significant amount of risk. It is not suitable for all traders and requires a thorough understanding of options trading and the underlying asset. It is also important to be aware of the potential for significant losses if the price of the underlying asset does not move as expected.