Could someone kindly explain why combining three calls (or three puts) at certain strike prices makes an asymmetrical butterfly spread?
I can see that this relationship is true through the payoff table, but I can't see it graphically because ASM's example uses fractional units of the out-of-the-money options, and I don't know how to graph those.
I can see that this relationship is true through the payoff table, but I can't see it graphically because ASM's example uses fractional units of the out-of-the-money options, and I don't know how to graph those.
Asymmetrical Butterfly Spread
