> 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-put-butterfly.md).

# Long Put Butterfly

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

![](https://1780133611-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F5XlTHrw6jWA1Duk8yCcW%2Fuploads%2F8ENu9zAbpufZzc6rZGxO%2FOption%20Payoff%20Charts-LP%20Butterfly.drawio.png?alt=media\&token=447aaa57-22ec-447d-97b9-410f81424f9a)

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

**Maximum Profit:** Limited to lower Long Put strike minus Short Put strike, minus debit paid.

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

**Breakeven Price:** \
• On the lower end, lowest Long Put strike plus the net debit paid.\
• On the higher end, highest Long Put 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 Put Butterflies are Vega negative, meaning that if volatility increases, the position loses value.