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A butterfly spread trade is one based on the belief that volatility in the market (and thus the premium investors pay to expose themselves to options trades) will go down or up in the future - but be different from the current volatility conditions. Most butterfly trades are relatively low risk, low reward sets. The "butterfly" nomenclature is there because these trades tend to "land soft" - i.e. you don't make a ton; you don't lose a ton.