Option Trading Strategy: Setup a Butterfly Spread
★ SUMMARY ★
Hey it’s Sasha Evdakov founder of Rise2Learn. In this video I want to share with you exactly behind What the Butterfly is when it comes to Trading Options and why you may want to trade the Butterfly.
The Butterfly’s just a fancy name for a type of spread because it looks like a butterfly. You can trade a butterfly to the upside you can’t really tell downside or you can trade it to collect option premium butterfly’s a very effective strategy because it uses a lot less margin and which means a lot less risk to be able to trade those larger dollar value stocks.
First I want to share with you exactly what the butterfly is and what it looks like on a regular diagram and then I want to show you in the trading program and how to set up the butterfly.
Posted at: http://tradersfly.com/2014/05/option-trading-strategy-setup-butterfly-spread/
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“ The Market doesn’t give you any Freebies “ Classic understatement.?
Hi Sasha, nice video, thanks. can you tell me if we can close the butterfly as soon as it hit the $60 dollar level or do you have to wait until the expiry date?
So using butterfly as day trading is a bad strategy?
look at me
Earning profit in future trading, you need to measure from the support line to the mid-peak or break line. Then take this measurement and repeat it up starting from the penetration level. To learn how to do this concept I recommend you use and learn Blended Model strategy created by Dmitry vladislav. it give a knowledgeable and good profit returns.
So good
Which software are you using?
Asymmetric trading….????
Dude I'm happy with $100-$300 per day or even a week and this should help right?
get to the point
Awesomely explained. Thanks much, Sasha. Do you have a video on reverse butterfly spread?
if I have credit spread and now trade turns against me i.e sold CE 1 lot @ 150 premium & brought higher price CE @ 100 premium , now on expiry I will hv losses if it closes against me, in this situation can I convert the trade where at least I can get my money back by converting the same trade into butterfly ?
Hi great video. If a have a sold a vertical credit spread and it went ITM, can i convert that to butterfly? Thanks!
hi Sasha, excellent video, wondering what trading software it is in your video?
Great video Sasha, Im starting out to learn Option, will spend most of my day today watching your videos.. Thanks for sharing..
kk
hello…(: what broker and website did u use in that video?thanks
I have a question (:. what broker/website were you in that video?
Hi Sasha, thanks for your informative videos. I have a question for you, I am trying to apply same Butterfly strategy to Swaption. Now, as per my understanding rate at the expiration of contract will behave same as strike price in Option. Can you please confirm if I am on the right track, if not please correct me.
Regards,
Gaurav
We are a big fan of Sasha, we have seen most of all his videos
Hi, Sasha, i have a question. lets assume the current price for apple is $100. with the butterfly spread strategy, you sell 2 call option at strike price @$100, and buy 1 at $90 and $110 respectively. my concern is, 1. if the stock price go beyond $110, there is only 1 call option @$110 to cover the loss. 2. why set up a call option at $90 strike price? How is it protect the account from losing money. Thanks in advance
another great video sasha thank you. few question 1) why do we get a credit when trading Iron butterflies? is the credit received from iron butterflies is better then the debit paid for it? thank you for your great work, keep the tutorials coming
Excellent
Great Video! I learned something new today.
you speak very well and not too fast
Thank you, Sasha…I'm learning tons….you certainly know what you're doing! I'm starting out…and,..I'm going to your website to see what's happening!
Sasha, after watching many option trading videos on you tube some of them on butterfly strategy your is probably one of the best; however, I could not find an answer to my question how far from the stock price would you want to put the short strike price? Is it one SD, 1/2 SD? what about the wings? how far it would make sense to put the break even points given the IV? what is your rule of thumb if I may ask. Regards, follower
Great video , as usual….HOWEVER….
IT IS ALWAYS NICE FOR YOU TO START OFF AS TO WHY WE WOULD WANT TO TRADE A BUTTERFLY,,,,,RIGHT OFF THE BAT….
THANKS
Excellent video
Do you have a facebook?
The types of people with big enough accounts to do these trades are not the type of people who have to use youtube to learn how.
great instruction and Videos thanks Sasha subbed
can you talk about the probability for options in TOS
Great videos subbed
Never cared for Butterflies……………..Iron Condors are better
Awesome Video!!
I saw the share price was at $604 at the beginning? how come at 10:15 none of these options were ITM or ATM for the butterfly spread? don't you have to Buy 1 ITM Call, Sell 2 ATM Calls, Buy 1 OTM Call?
What software are you using in this video, and can a regular person access it?
Very impressive video…
vega? delta? i'm lost