Collar and Butterfly

  1. Do the butterfly spread with puts and butterfly spread with calls share the same charts?

  2. In Kaplan note, the profit for Collar is: max(0,XL-St)-max(0,St-Xh) +St-S0.

Since Collar is the combination of a protective put and covered call, shouldn’t the profit equation of collar be the combination of profit for protective put and coverred call? If so, shouldn’t the equation be something like "max(0,XL-St)-max(0,St-Xh)+ 2*St - 2*S0 since both protective put and covered call proft equation has St-S0.

Thank you!

Yes. Same payoff, same profit.

A collar is not exactly a combination of a protective put and a covered call; a combination of those two would have a put and a share of stock and a call and a share of stock: two shares of stock. A collar has only one share of stock.

Your formula assumes two shares, not one.

I wrote a series of articles on option strategies that cover building each spread, computing the payoff, and computing the profit; they’re listed here: https://www.financialexamhelp123.com/cfa-level-iii/. One nice thing about the articles is that they don’t include any of the min/max junk that makes memorizing the strategies so difficult.