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A bearish butterfly is an advanced options trading strategy designed to profit from a moderate decline in the underlying asset's price. It involves:

1. **Selling one In-the-Money (ITM) call option.**
2. **Buying two At-the-Money (ATM) call options.**
3. **Selling one Out-of-the-Money (OTM) call option.**

Key Points

- **Net Debit:** Typically results in a net debit, meaning an upfront cost to enter the trade.
- **Profit Potential:** Maximum profit occurs if the stock price closes at the strike price of the ITM call at expiration.
- **Risk:** Maximum loss is capped and known in advance.
- **Complexity:** More complex than basic options strategies, requiring careful planning.

Advantages
- Limited risk with defined maximum loss.
- Designed to profit from a moderate decline in the underlying asset's price.
- Clearly defined profit and loss outcomes.

Disadvantages
- Requires an initial debit, which can be significant.
- Limited profit potential.
- More complex and suitable for experienced traders.

In summary, the bearish butterfly strategy is suitable for experienced traders expecting a moderate decline in the underlying asset, offering limited risk and predictable outcomes.
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