Skip Strike Butterfly

Because strikes are skipped between the body and wings. In a standard butterfly like S$32/S$33/S$34, strikes are adjacent. In a skip strike like S$31/S$33/S$35, the S$32 and S$34 strikes are 'skipped'.

Yes, typically. Skip strike butterflies are entered for a net debit because you buy the wings (expensive) and sell the body (cheaper). The iron butterfly version can be a credit.

You lose the debit paid, which is your maximum loss. If the stock is below the lower wing or above the upper wing at expiration, all options either expire worthless or net to zero.

Neither is universally better. Skip strike has wider profit zone (higher probability) but lower max profit. Standard has higher max profit but narrower zone (lower probability). Choose based on your view.

Yes. Singapore equity options have S$0.50 strike intervals, allowing various skip patterns. You can skip 1, 2, or more strikes depending on the width you want.

Generally use whichever is more liquid or has better pricing. If stock is below body, call butterflies may be cheaper. If stock is above body, put butterflies may be cheaper. Check both and choose the better execution.

Close at 50-75% of max profit to lock in gains, at 50% loss to limit damage, or at 14-21 DTE to avoid gamma risk. Don't hold to expiration unless position is deeply profitable and stock is at body.

You're short vega, so IV decrease helps and IV increase hurts. If IV drops after you enter, your position gains value faster. If IV spikes, your position may lose value even if stock stays in the profit zone.

Adjustments are limited due to the 3-strike structure. Options include: closing the position, rolling to a new center strike, or converting to a different structure. Often, closing is simplest and most effective.

Both are neutral, defined-risk strategies. Skip butterfly: pay debit, peak profit at body, plateau-shaped zone. Iron condor: receive credit, flat profit zone between shorts, higher probability but lower max profit per dollar risked.

Make one wing wider than the other. Bullish: wider put wing gives more downside room. Bearish: wider call wing gives more upside room. This can sometimes be entered for credit or zero cost.

Low volatility: smaller skip (expect tighter range). High volatility: larger skip (expect wider range). Uncertain: larger skip for safety. Match skip width to your expected stock range.

Put skew makes OTM puts more expensive. If skew is steep, call butterflies may be cheaper than put butterflies. Always compare both structures. You may also adjust wing strikes to find better pricing across the skew.

Monitor aggregate Greeks, especially total gamma and vega. Diversify across underlyings and expirations. Keep total butterfly allocation at 15-25% of portfolio. Rebalance when aggregate delta drifts significantly.

Enter 1-2 days after major events (earnings, Fed) when IV has crushed and stock has found new level. Center the body at new price, size skip for expected consolidation range. Benefit from both IV crush and theta decay.