CHAPTER 15
Butterfly Spreads
Your collection of option strategies has a lot in common with your toolbox. If there's a job to be done, there's probably a tool created specifically for that job. Most people can get by with a set of basic tools: hammer, saw, screwdriver, drill, pliers, duct tape, and so on. With these tools, most homeowners can complete the majority of jobs without needing more specialized tools.
Suppose a 175-foot eucalyptus tree falls across your road in a rainstorm. How would a hammer or screwdriver help with this 20-ton behemoth? In that situation, you'd need a tool that's above and beyond what most workshops hold. A Stihl 24-inch chainsaw with carbide-tipped saw blades would be about perfect for clearing the road and turning that tree into firewood. It's the right tool for the task at hand.
Occasionally, special jobs require special tools that you rarely pull out of the toolbox. If you've ever had to replace a screen, you know that there's a special roller tool that will help you quickly install the spline that holds the screen in place. Once you've attempted to install a screen spline with a screwdriver or other makeshift tool, you realize just how valuable the specialized tool can be. You don't need it often, but when you do need it, you're mighty glad it's there.
The same holds true for option strategies. Most traders in the majority of markets do just fine with the standard option strategies: long calls, long puts, debit spreads, credit spreads, and calendar ...
