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A four-leg (three-strike) options strategy that deliberately uses uneven wing widths to eliminate risk entirely on one side, in exchange for accepting a defined loss on the other — genuinely different from a standard butterfly's symmetric shape.

One of the more advanced strategies covered here. The construction is easy to get subtly wrong, so every number on this page was verified with a full numeric scan before being written down, not derived by reasoning alone.

A standard butterfly places both wings at equal distance from the body. A broken wing butterfly deliberately makes them unequal — one wing closer, one further. Done correctly, with the right premiums, this asymmetry can be structured so the position collects a net credit overall, which has a striking effect: the side with the narrower wing ends up with no possible loss at all, only a small guaranteed profit or the larger peak profit at the body — while the side with the wider wing keeps a real, but still fully defined and capped, loss.

In this example, the near wing sits just 100 points from the body, while the far wing sits 500 points away — a deliberately uneven, "broken" shape. Because the near wing is close, it's expensive to buy relative to how much protection it removes, which is exactly what lets the position collect a net credit here.

This is the section worth reading most carefully, because the shape genuinely isn't symmetric:

1. Above the near wing — a flat, guaranteed profit. Because the position was opened for a net credit, there's no price above this point where the trade loses money.
2. Between the near wing and the body — profit grows as the underlying approaches the body from above, peaking exactly at the body strike.
3. At the body — maximum profit for the entire position.
4. Between the body and the breakeven — profit shrinks as the underlying falls further, crossing to a loss at the breakeven.
5. Between the breakeven and the far wing — loss grows as the underlying falls further still.
6. At or below the far wing — maximum loss, fully capped and flat. Unlike the upside, this side has real, defined risk.

The name describes exactly this: one "wing" is genuinely broken, in the sense that it no longer provides symmetric protection — it's been deliberately shortened to convert what would otherwise be a two-sided risk into a one-sided one.

A Broken Wing Put Butterfly built this way fits a view that's neutral to slightly bullish, with a specific willingness to accept defined risk only on the downside — it suits a trader who wants a Short Put Butterfly-like profit shape but isn't comfortable leaving genuine risk on the upside as well. Because it's opened for a net credit, there's no scenario where simply "nothing happening at all" (the underlying finishing far above the setup) costs money, which some traders find more comfortable than strategies that lose on inaction.

Suppose Nifty is trading at 24,000 with a weekly expiry coming up, and lot size is 65. You're neutral to slightly bullish and want no risk if Nifty simply stays flat or rises.

1. Confirm the setup. You want a defined-risk bet centered near 23,700, but only on the downside.
2. Buy 1 put at the 23,800 strike (near wing, only 100 points from the body) for a premium of 85.
3. Sell 2 puts at the 23,700 strike (the body), collecting a premium of 58 each — 116 total.
4. Buy 1 put at the 23,200 strike (far wing, 500 points from the body) for a premium of 20.
5. Calculate the net credit: 116 − 85 − 20 = 11 points, or ₹715 at this lot size.
6. Understand the guaranteed zone: at or above 23,800, you're never worse off than this ₹715 credit.
7. Understand the peak: at exactly 23,700, maximum profit of ₹7,215.
8. Understand the loss side: profit shrinks below the body, crosses to a loss at 23,589, and reaches a capped maximum loss of ₹25,285 at or below 23,200.
9. See how it resolves at expiry:
   • Nifty finishes at 24,000 (above the near wing) → flat profit of ₹715.
   • Nifty finishes at 23,700 (the body) → maximum profit of ₹7,215.
   • Nifty finishes at or below 23,200 → maximum loss of ₹25,285, capped no matter how much further it falls.

Quick reference for the same trade:

Based on the worked example above. Notice the payoff line never dips below zero on the right side of the chart, but does on the left — that asymmetry is the entire point of this strategy. Move the cursor over the chart to see profit/loss at any price.

• The "no risk" side depends entirely on the credit structure. If the strikes or premiums used don't actually produce a net credit, this strategy loses its defining property and behaves like an ordinary asymmetric butterfly with risk on both sides — always confirm the net credit before assuming the guaranteed-profit zone exists.
• Three separate legs, some at 2x size, mean higher execution cost (bid-ask spread on each) than a simple two-leg spread.
• This is not a beginner strategy. The asymmetric shape is easy to misjudge without carefully working through the numbers, as this page's own construction shows.
• Index options on NSE are typically European-style and cash-settled — no early-assignment risk on the short legs.