This structure can simply be described as tying off the open ended risk involved in a Call spread 1x2.

In the Call spread 1x2 example of the 100/125 Call 1x2, we would just buy an additional Call above our 2 short 125 Calls.

Any strike above it would work, but let’s keep it equidistant for discussion and do the 100/125/150 Call Butterfly.

The end structure would be long 1x the 100 Call/short 2x the 125 Call/long 1x the 150 Call. The Max profit is same as that of a Call spread, the Strike differential less the premium paid for the structure. By adding the upper Call, the Max Loss is now limited to the Premium paid for the Butterfly. The great thing about the equidistant Call Fly is it is usually very cheap to purchase. The bad things are that is doesn’t usually pick up in price until expiration nears and it is very hard to pick an exact target price. If you buy a 100/125/150 Call Fly for $5, your break evens are 105 to 145.

That is a nice wide landing zone, but if the market lands outside of 105 to 145, you start losing your premium paid.

Equidistant Flies are great starter trades.

and here is ytour Profit and Loss expiration graph;

Throughout the learning section I will advise you to manually do an expiration Profit & Loss table. This allows you to visualize exactly what it is that you are doing and is something all beginner traders do to start learning about strategies.

YOU then just need to work out each individual leg profit and loss then net it out in a graph