Bull Butterfly – Big Payoff If the Expiry Is Right

Bull Butterfly – Target-Based Directional Precision (Illustrative Example:

| Nov 2024 | Historical Price Reference) Market View Bullish. Suitable when there is strong conviction on the expiry level, but limited expectation of follow-through beyond that level. Here, HCLTECH is expected to move from the 1740–1850 zone toward 1900 by Dec 2024. The Trade (Illustrative | Hypothetical Premiums) • Buy HCLTECH 1850 Call @ ₹210 • Sell 2 × HCLTECH 1900 Call @ ₹135 each • Buy HCLTECH 1950 Call @ ₹85 Net Premium Paid: ~₹25 (Based on historical price behaviour; premiums used for illustration only.) Breakeven • Lower BE: 1850 + Net Premium Paid • Upper BE: 1950 − Net Premium Paid Max Profit • 1900 − 1850 − Net Premium Paid • Maximum if HCLTECH expires near 1900 Max Loss • Limited to Net Premium Paid (₹25*lot-size) Premium & Margin • Premium: Usually paid • Margin: Required Effect of Time & Volatility • Time decay works in favour as price stays near the middle strike • Low sensitivity to volatility changes Pros / Cons • ✔ High reward-to-risk for target-based views • ✖ Requires precise price movement 📌 Disclaimer: This content is for information only and not investment advice. Investments in securities market are subject to market risks. Read all the related documents carefully before investing. AI may have been used for grammatical and sentence-structure refinement. Please consult a SEBI-registered advisor before making any investment decisions.