Put Broken Wing Butterfly option strategy
Put Broken Wing Butterfly is a butterfly with a wider upper wing, placed below the market. It profits most if the underlying falls to the short strike, and keeps a small gain if the fall overshoots.
Payoff at expiry
Nifty, lot size 65 · Nifty future 25,151 · 17 Nov 2026Legs
| Action | Option | Strike | Lots | Qty | Premium |
|---|---|---|---|---|---|
| BUY | ATM Put | 25,150 | 1 | 65 | ₹111.64 |
| SELL | OTM Put | 25,050 | 2 | 130 | ₹68.59 |
| BUY | OTM Put | 25,000 | 1 | 65 | ₹52.14 |
How it works
- Buy 1 ATM put at the 25,150 strike for ₹111.64, paying the premium.
- Sell 2 OTM puts at the 25,050 strike for ₹68.59 each, collecting the premium.
- Buy 1 OTM put at the 25,000 strike for ₹52.14, paying the premium.
- You pay a net ₹1,729 upfront for the position. This is the most you can lose.
Below 25,123 you profit, up to ₹4,752.
Above 25,123 you lose, up to ₹1,729.
Set-up: Buy 1 lot ATM Put, Sell 2 lots OTM Puts and Buy 1 lot further OTM Put one strike below the sold puts.
What happens if Nifty moves
Profit or loss at expiry| Nifty at expiry | Move | Profit / loss |
|---|---|---|
| 23,650 | −6% | +₹1,521 |
| 24,400 | −3% | +₹1,521 |
| 24,900 | −1% | +₹1,521 |
| 25,150 | Unchanged | −₹1,729 |
| 25,400 | +1% | −₹1,729 |
| 25,900 | +3% | −₹1,729 |
| 26,650 | +6% | −₹1,729 |
How the Greeks affect it
When to use
When you are moderately bearish and have a target price in mind for expiry.
- Low cost for a large payoff at the target.
- No loss if the fall overshoots the lower 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.
Put Broken Wing Butterfly: questions
What is a Put Broken Wing Butterfly strategy?
Put Broken Wing Butterfly is a butterfly with a wider upper wing, placed below the market. It profits most if the underlying falls to the short strike, and keeps a small gain if the fall overshoots.
When should you use a Put Broken Wing Butterfly?
When you are moderately bearish and have a target price in mind for expiry.
How do you set up a Put Broken Wing Butterfly?
Buy 1 lot ATM Put, Sell 2 lots OTM Puts and Buy 1 lot further OTM Put one strike below the sold puts.
What is the maximum profit of a Put Broken Wing Butterfly?
Limited, earned if the underlying closes at the short strike at expiry. Equal to the upper wing width less the net debit.
What is the maximum loss of a Put Broken Wing Butterfly?
Limited to the net debit paid, if the underlying stays at or above the highest strike.
What is the breakeven of a Put Broken Wing Butterfly?
With Nifty at 25,151, the example on this page breaks even at 25,123 at expiry.