You would normally attempt a butterfly spread stock option strategy when you want to take advantage of high stock option volatility and the range of stock prices in order to collect premiums.

The principal elements you should consider when engaging a butterfly spread are:

• Stock option volatility is high, in fact, the higher the better

• There are good reasons for you to believe that the underlying stock will be traded within a given price range

• The timing of entering the butterfly stock option trading strategy is favorable

• The expiration date of the options are less than 60 days away

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