Batman option strategy
Batman places a call butterfly above the market and a put butterfly below it. The payoff has two peaks, one on each side, that look like the ears of a bat.
Payoff at expiry
Nifty, lot size 65 · Nifty future 22,650 · 6 Oct 2026Legs
| Action | Option | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|
| BUY | OTM Call | 22,700 | 1 | 65 | ₹112.10 |
| SELL | OTM Call | 22,750 | 2 | 130 | ₹91.62 |
| BUY | OTM Call | 22,800 | 1 | 65 | ₹73.92 |
| BUY | OTM Put | 22,600 | 1 | 65 | ₹111.98 |
| SELL | OTM Put | 22,550 | 2 | 130 | ₹91.20 |
| BUY | OTM Put | 22,500 | 1 | 65 | ₹73.23 |
How it works
- Buy 1 OTM call at the 22,700 strike for ₹112.10, paying the premium.
- Sell 2 OTM calls at the 22,750 strike for ₹91.62 each, collecting the premium.
- Buy 1 OTM call at the 22,800 strike for ₹73.92, paying the premium.
- Buy 1 OTM put at the 22,600 strike for ₹111.98, paying the premium.
- Sell 2 OTM puts at the 22,550 strike for ₹91.20 each, collecting the premium.
- Buy 1 OTM put at the 22,500 strike for ₹73.23, paying the premium.
- You pay a net ₹363 upfront for the position. This is the most you can lose.
Below 22,500 you lose, up to ₹363.
Between 22,500 and 22,598 you profit, up to ₹2,818.
Between 22,598 and 22,702 you lose, up to ₹363.
Between 22,702 and 22,799 you profit, up to ₹2,830.
Above 22,799 you lose, up to ₹363.
Set-up: Buy 1 lot OTM Call, Sell 2 lots higher OTM Calls, Buy 1 lot next higher Call; Buy 1 lot OTM Put, Sell 2 lots lower OTM Puts, Buy 1 lot next lower Put.
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,300 | −6% | −₹363 |
| 21,950 | −3% | −₹363 |
| 22,400 | −1% | −₹363 |
| 22,650 | Unchanged | −₹363 |
| 22,900 | +1% | −₹363 |
| 23,350 | +3% | −₹363 |
| 24,000 | +6% | −₹363 |
How the Greeks affect it
When to use
When you expect a moderate move but not a big one, and are unsure of the direction.
- Low cost for two target zones.
- Risk is defined upfront.
- Does not need a view on direction.
Things to watch
- Loses if the underlying does not move at all.
- Six legs means more brokerage and slippage.
- Profit zones are narrow.
Batman: questions
What is a Batman strategy?
Batman places a call butterfly above the market and a put butterfly below it. The payoff has two peaks, one on each side, that look like the ears of a bat.
When should you use a Batman?
When you expect a moderate move but not a big one, and are unsure of the direction.
How do you set up a Batman?
Buy 1 lot OTM Call, Sell 2 lots higher OTM Calls, Buy 1 lot next higher Call; Buy 1 lot OTM Put, Sell 2 lots lower OTM Puts, Buy 1 lot next lower Put.
What is the maximum profit of a Batman?
Limited, earned if the underlying closes at either sold strike at expiry.
What is the maximum loss of a Batman?
Limited to the net debit paid, if the underlying stays at the current level or moves beyond the outer strikes.
What is the breakeven of a Batman?
With Nifty at 22,650, the example on this page breaks even at 22,500 and 22,598 and 22,702 and 22,799 at expiry.