The butter sign looks like you are scraping some butter on a knife onto a piece of toast. With your non-dominant hand, you make your flat palm face up. Then, taking your dominant hand with index finger and middle finger extended (to make a knife), tap or wipe down the non-dominant hand and curl the two fingers, as if spreading some butter with the knife onto the piece of bread.
If one of your baby's favorite snacks is butter on bread, make the sign as you are buttering her bread. You can use the sign whenever you are cooking and use butter, and soon, your baby will catch on. Learning the sign will allow your baby to exercise more control over snack time, and make her more patient as you prepare her snack. This forms the foundation for her eventually starting to help with snack preparation herself.
We teach the baby sign for butter once we begin working on solid foods like toast and pancakes.