Outlook: Range, tilted risk. Taught in full in Lesson 24, Iron condors & butterflies: income from calm. This page is the reference card.
Illustration, not a recommendation. The strikes and premiums on this page are fixed teaching figures, not live quotes, and no strategy suits every account or every market. Read the full disclaimer.
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What you must believe
The market stays up or pins near a level below, and you want a structure with zero risk on the side you trust and defined risk only on the side you fear.
Construction
Put side, from canon strikes: buy the 24,900 PE at ₹100, sell two 24,800 PEs at ₹90 each, buy the 24,600 PE at ₹40. Unequal wings (100 and 200 points) turn the classic butterfly's debit into a net credit of ₹40 per unit (₹2,600).
The numbers, before entry
Above 24,900: keep the ₹2,600 credit; the upside carries zero risk
Mildly long delta, long theta, short vega: a rent collector whose payoff diagram leans deliberately to one side.
Realistic expectations
The honest pitch: paid ₹2,600 to hold a position that cannot lose unless NIFTY falls about 1.4%, with a bonus if it pins the wall. The trade-off against a plain credit spread is complexity and a worse fill (four legs of toll). Most useful when you would sell a put spread anyway and want the pin bonus attached.
Management rules
Treat it as a credit spread with a kicker: same 50 to 60% profit-taking, same exit on a broken floor
The peak is a bonus, never the plan; do not hold into expiry chasing it
Watch all four legs' liquidity before entry; the toll quadruples
With other strategies
It is an iron condor that deleted the side you trust: bullish weeks convert the call-side risk into extra credit down below
Against the iron butterfly, it is the asymmetric rebuild: same pin logic at the wall, with one side's risk engineered away
A put credit spread plus a pin bet is its honest decomposition: price those two parts separately and the entry judges itself
OI walls and the gamma map (Lessons 15 and 27) nominate the sold strike: the peak belongs at the crowd's floor, where pinning physics actually operates
Common mistakes
Building it for the credit without noticing which side carries the risk
Placing the sold strikes inside the expected move for a fatter peak
Fighting four illiquid legs and donating the edge to the spread toll