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So appreciate the video on butterflies, however, the butterfly strategy you are describing as a"lottery ticket" type is known as the LONG BUTTERFLY SPREADS which is a neutral strategy that works best with low volatility focused on keeping the price within a RANGE. But there is another type called SHORT BUTTERFLY SPREADS which is more directional and thus has a higher probability and in my experience, higher profit margins because you essentially want the price to make a move either up or down (it doesn't matter which direction) and works best with high volatility and honestly MUCH EASIER to predict. I mention this because NOT all butterfly spreads are the same or should be viewed as lottery tickets and it's usually the long butterfly spreads that give Butterfly trades a bad wrap because new traders don't understand the differences or use cases for each one.
This is how you explain how to trade options (on TOS) effectively and concisely, without no BS and no fluff, hands down!!!Excellent job my friend. You now have a new subscriber, thank you.I've been looking for a video like this for ages.
This was a GREAT video! You explain things very clearly and to the point as well. Please make more videos!! Hopefully you have one on debit spreads! New Subscriber here!
Do you have any videos on a broken wing butterfly which gives you a credit, and a broken heart butterfly as well. Would also like to see the actual mechanics of closing the trade. Your videos are very informative and easy to understand.
Do you need to change the price when you close the option. For example, if you paid .30 for the option which it shows when you buy it and you get up 25% and decide to close the option do you need to input a price where the .30 was at or does it automatically give you the 25% profit, or do you have to figure out what price to close it out for?
What option strategy do you think is the best to make money calendar spreads?I just want to learn a strategy to become consistent.I’m a new trader and have been selling cash secured puts and put credit spreads.
Toward the end of the video you mention that you run the risk of assignment if you don't close out the spread and instead allow the options to expire. Can you explain that, and why you wouldn't be at the same risk for assignment at any time prior to expiration?
Is it possible to buy a butterfly spread for a credit? Or does TOS or CBOE not allow this? My orders get cancelld even though TOS shows a credit is possilbe for the butterfly.
Interesting, but why didn,'t you mention the collateral needed, It seems to me as a combined debit put spread and a credit put spread; so there is some collateral money needed.
It’s been a while since I made this so I hope I made it clear, there’s no “collateral” needed in the sense you’re think of like a short vertical. It’s going to be the same as a long options or long vertical, you’re tying up the debit you pay for the spread as that is the max loss. So if I buy a butterfly for 10 cents, I’d need $10 in option BP. That would also be the most I could lose assuming I close out before expiration
You can see it for the entire spread and for each individual contract on the monitor page. To see it for the entire spread and have it do the math for you, you'll need to adjust your settings slightly. You'll go to setup > application settings > positions > group positions by "order"
Never gave a long butterfly position example. Never explains how to enter / exit with price action on a chart. Lame and weak. Leaves out a lot of needed information.
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🛠Just launched my trading journal! If you trade stocks, options, futures, or crypto, give it a try with a 7-day free trial and let me know what you think! traderlog.io/
So appreciate the video on butterflies, however, the butterfly strategy you are describing as a"lottery ticket" type is known as the LONG BUTTERFLY SPREADS which is a neutral strategy that works best with low volatility focused on keeping the price within a RANGE. But there is another type called SHORT BUTTERFLY SPREADS which is more directional and thus has a higher probability and in my experience, higher profit margins because you essentially want the price to make a move either up or down (it doesn't matter which direction) and works best with high volatility and honestly MUCH EASIER to predict. I mention this because NOT all butterfly spreads are the same or should be viewed as lottery tickets and it's usually the long butterfly spreads that give Butterfly trades a bad wrap because new traders don't understand the differences or use cases for each one.
Does that mean SHORT BUTTERFLY could work on earning trades? where you see high IV and larger moves?
👀 Wow! I'm curious about these Short Butterflies now!!
This is how you explain how to trade options (on TOS) effectively and concisely, without no BS and no fluff, hands down!!!Excellent job my friend. You now have a new subscriber, thank you.I've been looking for a video like this for ages.
Great video. What's the difference between call and puts butterfly?
This was a GREAT video! You explain things very clearly and to the point as well. Please make more videos!! Hopefully you have one on debit spreads! New Subscriber here!
Do you have any videos on a broken wing butterfly which gives you a credit, and a broken heart butterfly as well. Would also like to see the actual mechanics of closing the trade. Your videos are very informative and easy to understand.
Do you need to change the price when you close the option. For example, if you paid .30 for the option which it shows when you buy it and you get up 25% and decide to close the option do you need to input a price where the .30 was at or does it automatically give you the 25% profit, or do you have to figure out what price to close it out for?
What option strategy do you think is the best to make money calendar spreads?I just want to learn a strategy to become consistent.I’m a new trader and have been selling cash secured puts and put credit spreads.
Toward the end of the video you mention that you run the risk of assignment if you don't close out the spread and instead allow the options to expire. Can you explain that, and why you wouldn't be at the same risk for assignment at any time prior to expiration?
In what order do you close the option?
Is it possible to buy a butterfly spread for a credit? Or does TOS or CBOE not allow this? My orders get cancelld even though TOS shows a credit is possilbe for the butterfly.
Great 👍 video was wondering how to set this up.
Why did you do only put flys, doesn't T.O.S. allow call flys? Thanks.
how come my buying power shows negative of 10k instead of few less than a hundred. any advice?
Merck would be a good stock for a this strategy - it's very low volume, flat as a board sideways for months.
What if it gets called away?
sHOWING HOW TO QUICKLY ANALYZE THE POSITION WAS A MAJOR PLAY
How to close this order
Interesting, but why didn,'t you mention the collateral needed, It seems to me as a combined debit put spread and a credit put spread; so there is some collateral money needed.
It’s been a while since I made this so I hope I made it clear, there’s no “collateral” needed in the sense you’re think of like a short vertical. It’s going to be the same as a long options or long vertical, you’re tying up the debit you pay for the spread as that is the max loss. So if I buy a butterfly for 10 cents, I’d need $10 in option BP. That would also be the most I could lose assuming I close out before expiration
how can i see the premium paid on each contract?
You can see it for the entire spread and for each individual contract on the monitor page. To see it for the entire spread and have it do the math for you, you'll need to adjust your settings slightly.
You'll go to setup > application settings > positions > group positions by "order"
@@shortthestrike Thanks! You should really start streaming
Never gave a long butterfly position example. Never explains how to enter / exit with price action on a chart. Lame and weak. Leaves out a lot of needed information.