> For the complete documentation index, see [llms.txt](https://guide.laevitas.ch/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://guide.laevitas.ch/option-strategies/long-call-butterfly.md).

# Long Call Butterfly

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A Long Call Butterfly is a combination of buying a Call, selling 2 higher strike price Calls, and buying an even higher strike price Call, with the same width across all strikes.
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**Payoff Diagram:**

![](/files/QPM4xejuS2Czw2VjUBFv)

**Direction Assumption:** Neutral if done with ATM short strikes, or Bullish if done with OTM short strikes.

**Maximum Profit:** Limited to the difference between the Long Call strike and Short Call strike, minus debit paid.

**Maximum Loss:** Limited to net debit paid.

**Breakeven Price:** \
• On the lower end, lower Long Call strike plus the net debit paid.\
• On the higher end, higher Long Call strike minus the net debit paid.

**Theta:** Passage of Time -> Positive Effect\
The net effect of time decay is positive. Should the underlying stays between the short strikes at expiration, all legs will decay to zero and expire worthless.

**Volatility:** \
If Volatility decreases -> Positive Effect.\
If Volatility increases -> Negative Effect. \
\
Long Call Butterflies are Vega negative, meaning that if volatility increases, the position loses value.