Skip-Strike Put Butterfly
Also known as: Skip-Strike Put Fly, Broken Wing Put Fly
Moderately bearish — want a butterfly profit zone below the current price with some forgiveness if the stock keeps falling past the short strikes
Risk Profile at a Glance
How to Construct the Skip-Strike Put Butterfly
- 1.Buy 1 put at strike C
- 2.Sell 2 puts at strike B
- 3.Buy 1 put at strike A (A skips one strike below B — wider lower wing)
- 4.Small debit or small credit
Understanding the Skip-Strike Put Butterfly
The skip-strike put butterfly is the bearish counterpart to the skip-strike call fly. By skipping a strike between the short puts and the lower long put, you widen the lower wing, creating a zone of small profit or near-breakeven if the stock falls past the short strikes to the lower long. This is more forgiving than a standard put butterfly, which begins losing immediately below the lower wing. The profit zone centers below the current stock price (near strike B), making it ideal for moderately bearish trades where you expect the stock to drift lower but not collapse.
The skip-strike structure gives you a wider profit range than a standard butterfly for a similar or smaller cost, at the expense of reduced maximum profit. In the EdgeOS framework, skip-strike put flies work best during bear count 2–4 when the stock is in an early bearish sequence and expected to drift lower over 2–4 weeks..
When to Use It — EdgeOS Signal Integration
- ✓Ideal when SCTR < 4 and EdgeOS bear count = 1 (fresh bear trigger)
- ✓Extension score at or above 0.8 with stock near the upper ATR level
- ✓Confirmed or fluid bearish trend — EMA alignment supports the short side
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Frequently Asked Questions
What is the Skip-Strike Put Butterfly options strategy?
The skip-strike put butterfly is the bearish counterpart to the skip-strike call fly. By skipping a strike between the short puts and the lower long put, you widen the lower wing, creating a zone of small profit or near-breakeven if the stock falls past the short strikes to the lower long.
When should I use the Skip-Strike Put Butterfly?
Moderately bearish — want a butterfly profit zone below the current price with some forgiveness if the stock keeps falling past the short strikes
What is the maximum loss on the Skip-Strike Put Butterfly?
The maximum loss is fully defined at entry: the net debit paid (for debit strategies) or the spread width minus the credit received (for credit spreads). You can never lose more than this amount.
How does the Skip-Strike Put Butterfly compare to similar strategies?
The Skip-Strike Put Butterfly is a moderately bearish debit strategy. Compared to the Long Put Butterfly (neutral, debit), the Skip-Strike Put Butterfly has limited max risk and limited max reward. Your choice depends on your directional bias, IV environment, and risk tolerance. The TraderValue strategy comparison tool lets you see the exact payoff differences side by side.