A modified butterfly that skips a strike between the short options and the upper long option. Creates a bullish bias — you want the stock to move up to the short strikes. Sometimes called a 'broken wing butterfly'.
First short strike - Long strike - Net debit (maximum at first short strike)
Net premium paid
Lower strike + Net premium
Long 1 ATM Call + Short 2 OTM Calls + Long 1 further OTM Call (skip a strike)
Limited profit and limited risk. Directional bias with defined outcomes.
When you're moderately bullish and expect the stock to reach a specific target. Lower cost than a standard bull spread with a similar directional bias.