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A stock price is currently $23. A reverse (i.e short) butterfly spread is created from options with strike prices of $20, $25, and $30. Which of the following is true?

A. The gain when the stock price is greater that $30 is less than the gain when the stock price is less than $20
B. The gain when the stock price is greater that $30 is greater than the gain when the stock price is less than $20
C. The gain when the stock price is greater that $30 is the same as the gain when the stock price is less than $20
D. It is incorrect to assume that there is always a gain when the stock price is greater than $30 or less than $20

User Herby
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Answer and Explanation:

C. The gain when the stock price is greater that $30 is the same as the gain when the stock price is less than $20

User Edwin Van Mierlo
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