1. What it is
Buy one call and two puts at the same strike and expiration.
2. Why use it
Buy movement exposure with extra weight on a downside move.
3. How the numbers work
View example
- Buy 1 × Call · Strike 100
- Buy 2 × Put · Strike 100
All option legs have the same expiration.
- Option premium paid
- 9
- Expiration breakeven
- 95.5 / 109
- Maximum expiration profit
- Theoretically unlimited
- Maximum expiration loss
- 9
- Underlying at expiration 100 → Loss 9
- Underlying at expiration 110 → Profit 1
4. How it changes
Positive gamma and vega come from all three legs. Extra puts add bearish weight, while the total premium increases the usual time-decay burden.
5. What to watch for
All three bought options can lose the total premium. Upside profit is uncapped; downside profit is bounded by the underlying reaching zero.
This is not simply a cheap bearish trade. The extra option increases cost and the amount of movement needed to recover it.
Examples use illustrative entry prices and amounts per underlying unit, before costs. Contract amounts require the contract multiplier. Expiration payoffs assume the illustrated legs remain intact; earlier position values and exercise or assignment outcomes can differ.