A butterfly is a type of option strategy with a limited max loss that is either betting for or against a stock or future to have little to no price movement (often called a “pin”). If betting for a pin, then it is counting on a trade to end up in a specific narrow range. If betting against a pin, then the strategy gets paid if it ends up anywhere except for where the pin is. Another characteristic of butterflies is that they tend to have a very low max profit until the moment of expiration, which makes them difficult to hedge.