Call Broken Wing Butterfly option strategy
Call Broken Wing Butterfly is a butterfly with a wider lower wing, placed above the market. It profits most if the underlying rises to the short strike, and unlike a regular butterfly it keeps a small gain if the rally overshoots.
Payoff at expiry
Nifty, lot size 65 · Nifty future 22,924 · 19 Oct 2026Legs
| Action | Option | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|
| BUY | ATM Call | 22,900 | 1 | 65 | ₹136.80 |
| SELL | OTM Call | 23,000 | 2 | 130 | ₹90.36 |
| BUY | OTM Call | 23,050 | 1 | 65 | ₹71.82 |
How it works
- Buy 1 ATM call at the 22,900 strike for ₹136.80, paying the premium.
- Sell 2 OTM calls at the 23,000 strike for ₹90.36 each, collecting the premium.
- Buy 1 OTM call at the 23,050 strike for ₹71.82, paying the premium.
- You pay a net ₹1,814 upfront for the position. This is the most you can lose.
Below 22,928 you lose, up to ₹1,814.
Above 22,928 you profit, up to ₹4,220.
Set-up: Buy 1 lot ATM Call, Sell 2 lots OTM Calls and Buy 1 lot further OTM Call one strike above the sold calls.
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 21,550 | −6% | −₹1,814 |
| 22,250 | −3% | −₹1,814 |
| 22,700 | −1% | −₹1,814 |
| 22,900 | Unchanged | −₹1,814 |
| 23,150 | +1% | +₹1,436 |
| 23,600 | +3% | +₹1,437 |
| 24,300 | +6% | +₹1,436 |
How the Greeks affect it
When to use
When you are moderately bullish and have a target price in mind for expiry.
- Low cost for a large payoff at the target.
- No loss if the rally overshoots the upper strike.
- Risk is defined upfront.
Things to watch
- Needs the underlying to reach the target zone.
- Profit is small away from the short strike.
- Four contracts across three strikes.
Call Broken Wing Butterfly: questions
What is a Call Broken Wing Butterfly strategy?
Call Broken Wing Butterfly is a butterfly with a wider lower wing, placed above the market. It profits most if the underlying rises to the short strike, and unlike a regular butterfly it keeps a small gain if the rally overshoots.
When should you use a Call Broken Wing Butterfly?
When you are moderately bullish and have a target price in mind for expiry.
How do you set up a Call Broken Wing Butterfly?
Buy 1 lot ATM Call, Sell 2 lots OTM Calls and Buy 1 lot further OTM Call one strike above the sold calls.
What is the maximum profit of a Call Broken Wing Butterfly?
Limited, earned if the underlying closes at the short strike at expiry. Equal to the lower wing width less the net debit.
What is the maximum loss of a Call Broken Wing Butterfly?
Limited to the net debit paid, if the underlying stays at or below the lowest strike.
What is the breakeven of a Call Broken Wing Butterfly?
With Nifty at 22,924, the example on this page breaks even at 22,928 at expiry.