Butterfly Spread

If you’re new to our site, make sure to watch our FREE Online Option Income Trading Video by Going Here. Thanks for visiting! When I first began trading the iron condor, my game plan was to leave the trade on all the way to the bitter end. After I placed the trade, I would just [...]

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 market, started a big down move, eventually traveling more than 10% before bouncing back up some today. Despite the move, thanks to [...]

April 2010 Expiration This months Butterfly Spread Trade was another pretty much ‘perfect’ trade. Very little management was required – lazy trading at it’s finest. Opened this trade on 3-21-10 – closed it on 3-29-10 – for an open trade duration of just 9 days. addthis_url = ‘http%3A%2F%2Fwww.butterflyspreadblog.com%2Foption-trades%2Fapril-10-rut-butterfly-spread-iron-condor-closed%2F’; addthis_title = ‘APRIL+%E2%80%9810+RUT+BUTTERFLY+SPREAD+%26%238211%3B+IRON+CONDOR+CLOSED’; addthis_pub = ”; Technorati [...]

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 [...]

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 [...]

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 [...]

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 [...]

Non directional trading enthusiasts will many times use the butterfly option strategy as a way take advantage of a stock or index or ETF that is caught in a chart range – or an underlying whose options provide good premiums but doesn’t gyrate wildly around. Because the short strikes of these butterfly spread positions are [...]

Butterfly Spread Trades can be composed of all call options, all put options, or both call and put options. Regardless of how they are constructed – for the most part they appear the same in a trading platform risk graph pay off diagram window – and also for the most part they perform the same [...]

addthis_url = ‘http%3A%2F%2Fwww.butterflyspreadblog.com%2Foption-trades%2Fdec-09-rut-butterfly-spread-iron-condor-closed%2F’; addthis_title = ‘DEC+%26%238217%3B09+RUT+Butterfly+Spread+%26%238211%3B+Iron+Condor+Closed’; addthis_pub = ”; Technorati Tags: Butterfly Option, Butterfly Spread, Credit Spread, Iron Condor, Vertical Spread