Trading Strategies5 min read
Butterfly Spread: Pinning Profit Around a Strike
Limited-risk butterfly structures for expiry pinning views — when you expect Nifty to land near a specific strike.
Butterfly Anatomy
A butterfly combines bull and bear spreads sharing a middle strike — low cost, limited risk, max profit if underlying expires at center strike. Popular for expiry day pin thesis near max pain.
Losses limited to debit paid. Requires precise range — small move away from center erodes profit. Liquidity on far wings can be poor.
Expiry Pin Trades
Use only when you have statistical or OI-based pin view, not hope.
Frequently Asked Questions
- Who is this guide for?
- Nifty and Bank Nifty option traders who want structured education around chain reading, OI, and risk — not signal tips.
- Can I trade from this article alone?
- Use it as education paired with live analysis on OptionTools. Paper trade or size down while validating ideas.
Key Takeaways
- Cheap defined-risk bet on expiry pin.
- Max profit only in narrow outcome band.
- Align center strike with max pain / OI peak.
Related Articles
- Max Pain Explained: Where Options Expire WorthlessLearn how max pain is calculated, why expiry week gravitates toward it, and how Nifty options traders use max pain in intraday planning.
- Expiry Day Strategies for Weekly Nifty & Bank Nifty OptionsPractical expiry-day tactics — pin risk, gamma scalping, when to stay flat, and how max pain and OI shape the final session.
- Expiry Statistics: What History Says About Weekly OptionsStatistical tendencies on Nifty weekly expiry — range compression, max pain gravity, and when historical patterns fail.