Butterfly Spread

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This was our second RUT Butterfly we put on this month. This trade was placed with RUT trading around 658. Immediately upon placing the trade, the index, along with the rest of the [...]

ABOVE: Position as we start to unwind it. Profit target hit.
ABOVE: Left on one of our extra long calls as lottery ticket.
Our profit goal is locked in.
Closed out our July Butterfly / Iron Condor for just under 9% profit.

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Our July Iron Condor / Butterfly Spread is off and running. So far so good as we have a profit already and have our ‘ whipsaw curbs’ in place while retaining a good theta. Stay tuned…

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Technorati [...]

Closed out our last June Iron Condor Butterfly Spread today for right under a 5% gain. Todays big down move in reaction to employment numbers put the position right at the sweet spot at the open. Rising vols initially hurt the position a bit, however as the morning progressed, what appeared to be some friday [...]

During the ‘flash crash’ where the dow sunk 1000 points we had an iron butterlfy position on that performed remarkably well thanks to a simple, cheap, way out of the money put adjustment we had made earlier in the day.
Taken at 11:40 AM
A couple hours before the big drop, we put on a simple put [...]

When you look at a risk graph of the butterfly spread, you can see that the butterfly payoff is tremendous - especially when compared to other option income spread strategies such as the iron condor, the credit spread, the diagonal, double diagonal, the calendar, double calendar, etc.
Depending on where the wings are placed on these [...]

Butterfly Option Spreads are one of the most ‘robust’ option trades of the ‘main’ option spread income strategies. In other words, the butterfly spread can withstand more ‘abuse’ from a volatile market than say the iron condor, diagonal, or calendar, - and still come out smelling like a rose.
One reason for this has to do [...]

The vertical spread is basic building block of the butterfly spread. In fact, the vertical spread - either in the form of a credit spread or a debit spread is a basic building block of most option spread strategies.
In the case of the butterfly spread, this option trade can be created out of a debit [...]

The butterfly spread is a delta neutral theta positive options trade that performs ideally when used on a stock or index that is range bound or not moving wildly all over the place.
The traditional butterfly strategy is built from two separate option spread strategies: the debit spread and the credit spread - and is composed [...]

The butterfly strategy is one of the most robust and versatile option selling techniques available.
In a lazy, quiet market condition there is very little - if anything - to do to manage these positions - other than watch your 0 day risk graph line rise up as your account grows - then close it out [...]