Butterfly Spreads and Theta

Butterfly Spreads have an interesting relationship with theta. While neutral Butterflies with the short strikes placed close to where the stock price currently sits will always be <a href="https://youtu.be/_4eIbo4WMzA">positive theta</a>, any Butterflies that are more and more directional will slowly lose that positive theta and could possibly <a href="https://ontt.tv/3F98a">become negative theta</a> at trade entry. So does a more directional Butterfly ever make sense? Today, we answer that question within the context of the GLD Butterfly we have on in the portfolio.