Which positions are profitable in a falling market?

Which positions are profitable in falling markets? Debit put spreads (being a net buyer), like simply buying a put, are profitable if the market falls. Credit put spreads (being a net seller), like simply selling a put, are profitable if the market rises.

quizlet.com - Series 7: Options (Ratio Strategies / Options Strategies Summary) - Quizlet

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is stable

A butterfly spread is a market neutral position that is created by combining a "long" spread with a "short spread." It is called a "butterfly" because the 2 "outer" long positions are the wings of the butterfly, while the 2 short positions at the same strike are the "body" of the butterfly/ The position is established with a small debit that establishes the maximum potential loss if the market moves broadly up or down. If the market stays right in the middle ($60 in this example), the gain is maximized. Here is what happens as the market moves: Market is at $55 or lower: All positions expire and the net $1 debit is lost. Market moves to $56: $1 is gained on the long 55 call, offsetting the $1 debit = breakeven. Market moves to $57: $2 is gained on the long 55 call, offset by the $1 debit = $1 profit Market moves to $58: $3 is gained on the long 55 call, offset by the $1 debit = $2 profit Market moves to $59: $4 is gained on the long 55 call, offset by the $1 debit = $3 profit Market moves to $60: $5 is gained on the long 55 call, offset by the $1 debit = $4 profit. This is the maximum potential gain. Market moves to $61: $5 is gained on the exercise of the long 55 call and one of the short 60 calls, offset by a $1 loss on the other short 60 call and the $1 debit = $3 profit Market moves to $62: $5 is gained on the exercise of the long 55 call and one of the short 60 calls, offset by a $2 loss on the other short 60 call and the $1 debit = $2 profit Market moves to $63: $5 is gained on the exercise of the long 55 call and one of the short 60 calls, offset by a $3 loss on the other short 60 call and the $1 debit = $1 profit Market moves to $64: $5 is gained on the exercise of the long 55 call and one of the short 60 calls, offset by a $4 loss on the other short 60 call and the $1 debit = $0 profit. This is the upside breakeven. Market moves to $65 or higher: All positions are exercised. $5 is gained on the exercise of the long 55 call and one of the short 60 calls, offset by a $5 loss on the exercise other short 60 call and the long 65 call. The loss is the debit of $1.

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