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I do 0DTE balanced FLYs on SPX later in the day between 1pm and 3pm EST. , noting the average of the highest open interest call and put strikes at market open, then note the highest volume averages between the call and put strikes on the options chain and the options time and sales through the day for an pin estimate. When gamma increases slowly and follows a strike within those averages I am usually within 5 points of the close. Low implied vol. makes the spread more expensive compared to higher implied volatility/expected moves. Usually works better during balancing days rather than rip your face off rallies or dumps. I usually close the FLY before market close rather than waiting for the EOD close on SPX at 4pm before the late day bots and market makers scratch portions of your winnings.
Good Lord! This makes so much more sense from the first way you drew this out diagrammatically in this video (as opposed to the ‘tent’ or ‘butterfly’ pictogram normally shown) to the directional strategic way you use it, than I’ve ever seen it before. NOW, finally, I understand why anyone would bother with a butterfly. Thanks.
Hi, Danielle, on the "Do Not Use Butterfly" section, I don't get the point of " Debit spread cost the same as a fly". Could you give me a example please? Thank you for help!
Hi D. Amazing . Thanks for explaining. Coupe of questions - what time frame you use for tech analysis like Fibonacci and volume squeeze? - for making a bais , is 1 hr chart with 50 EMA , good base instead which side first hr candle ends .. take that as center point? Thanks.
Directional butterflies make sense, but how do you protect your large debits if the underlying don't reach the target zone? Or it retreats, then you will protect your fly with a credit spread, and then the underlying will run through your target zone. How to avoid such scenarios?
A butterfly is a bear spread on top of a bull spread Exiting with just a few days left (being right but time left is impossible to exit because works on principle of deflating the target strikes) Opposite of trading single legs time is your friend there, not the fly
Danielle, have you used your Butterfly Strategy on the Index ETFs - $SPY, $QQQ, $IWM? If so, would you ever spend a little more upfront and set them up with and earlier expiry on the middle strike to try to increase profit near expiration?
Sure wish she would explain the downside if the trend turns against the butterfly. Or if the mid strike gets blown through rapidly. The buyer of that put could exercise and where does that leave you?
Thanks, good stuff! The focus on Call side looks to work out better with volatility bumps making positions more resilient to down moves. (?). Thanks again and keep smiling!
Thanks Danielle for the great info. I was told to pick stocks that don't move much at all, not true. I like your target strategy and will give it a whirl next week.
I put on a butterfly trade and the net delta for the butterfly was around 1-5 (very low). The ticker got close to my center strike (the short call position), but I barely made any money because the net delta for the position was so low. Am I doing something wrong?
Excellent video and description. Do you ever trade broken wing butterflies? When do you choose between the two? I understand that it is more consistent?
I am brand new to butterfly . Very basic question, if I buy $100 butterfly call and I am dead wrong stock goes against me, how much would I lose? All $100? Vice versa, if I buy $100 put butterfly, stick goes against me 100%, how much would I lose? All $100 or more? I know in equity, if I short stocks it goes against me, loss is limitless . If I buy stock and it drops I will only lose what I paid for.
Sign up for a Think or Swim platform, before you confirm a trade it tell you the max lost. In this case it will be your full amount. However, if you are right your return can be 4x (as one example) while your loss can only what you put in. It's a trade off essentially, you can multiple your money with little money without having to wait for your stock to multiple 4 times, which likely will not happen, so your "spreads" will help you get you there. You still can monitor the trade everyday and pull out before you ever get a full loss or before a multiplier.
This was really great, thank you! Much easier to follow visually and understand than your other one, and that one was pretty good, too. It has really opened my eyes to the possibilities! Just put on my first 'Fly on SPY today and hoping to test the waters on SPXW once things settle down a bit. Keep putting out the great content, Danielle!
Great video,very informative, thank you! Just 1 small advise: buy yourself a good voice microphone to make your vids professional. Your sound is really bad, made from your living room. Good luck!
this may sound like a stupid question but, if you set up a butterfly, and you are in the green, can you close it early to take profits like a regular call or put option; or do you have to hold it until expiration? Thanks in advance if anyone answers
👀 See what better financial charting can do for you!
Start your FREE 1-month trial today at stockcharts.com
👍🏻 If you enjoyed this video be sure to hit the THUMBS UP
✅ If you found value, consider SUBSCRIBING to our channel and ring the bell so you never miss a new video! Subscribe Here: tinyurl.com/wvet7qj
I do 0DTE balanced FLYs on SPX later in the day between 1pm and 3pm EST. , noting the average of the highest open interest call and put strikes at market open, then note the highest volume averages between the call and put strikes on the options chain and the options time and sales through the day for an pin estimate. When gamma increases slowly and follows a strike within those averages I am usually within 5 points of the close. Low implied vol. makes the spread more expensive compared to higher implied volatility/expected moves. Usually works better during balancing days rather than rip your face off rallies or dumps. I usually close the FLY before market close rather than waiting for the EOD close on SPX at 4pm before the late day bots and market makers scratch portions of your winnings.
That is the best explanation of a butterfly I have ever heard. Thank you for sharing your knowledge.
Listening to mastering the trade
Good Lord! This makes so much more sense from the first way you drew this out diagrammatically in this video (as opposed to the ‘tent’ or ‘butterfly’ pictogram normally shown) to the directional strategic way you use it, than I’ve ever seen it before. NOW, finally, I understand why anyone would bother with a butterfly. Thanks.
Hi, Danielle, on the "Do Not Use Butterfly" section, I don't get the point of " Debit spread cost the same as a fly". Could you give me a example please?
Thank you for help!
I’ve been watching tons of Butterfly strategies videos. This one was surely a big help. Thanks so much.
Hi D. Amazing . Thanks for explaining. Coupe of questions
- what time frame you use for tech analysis like Fibonacci and volume squeeze?
- for making a bais , is 1 hr chart with 50 EMA , good base instead which side first hr candle ends .. take that as center point? Thanks.
Directional butterflies make sense, but how do you protect your large debits if the underlying don't reach the target zone? Or it retreats, then you will protect your fly with a credit spread, and then the underlying will run through your target zone. How to avoid such scenarios?
A butterfly is a bear spread on top of a bull spread
Exiting with just a few days left (being right but time left is impossible to exit because works on principle of deflating the target strikes)
Opposite of trading single legs time is your friend there, not the fly
Danielle, have you used your Butterfly Strategy on the Index ETFs - $SPY, $QQQ, $IWM? If so, would you ever spend a little more upfront and set them up with and earlier expiry on the middle strike to try to increase profit near expiration?
Sure wish she would explain the downside if the trend turns against the butterfly. Or if the mid strike gets blown through rapidly. The buyer of that put could exercise and where does that leave you?
Or also how difficult the trade executions are... how far from MARK price are they getting filled?
Thanks, good stuff! The focus on Call side looks to work out better with volatility bumps making positions more resilient to down moves. (?). Thanks again and keep smiling!
I’m only 1/2 way through it but this is great. Thank you, Danielle
Great video Danielle! Also really enjoyed your excerpt from John's book, great story!
Thanks Danielle for the great info. I was told to pick stocks that don't move much at all, not true. I like your target strategy and will give it a whirl next week.
Hi!, why dont you use Put and Call to make the BF and get a credit? you prefer to use only Calls and pay a debit.
I put on a butterfly trade and the net delta for the butterfly was around 1-5 (very low). The ticker got close to my center strike (the short call position), but I barely made any money because the net delta for the position was so low. Am I doing something wrong?
Excellent video and description. Do you ever trade broken wing butterflies? When do you choose between the two? I understand that it is more consistent?
I am brand new to butterfly . Very basic question, if I buy $100 butterfly call and I am dead wrong stock goes against me, how much would I lose? All $100? Vice versa, if I buy $100 put butterfly, stick goes against me 100%, how much would I lose? All $100 or more? I know in equity, if I short stocks it goes against me, loss is limitless . If I buy stock and it drops I will only lose what I paid for.
Sign up for a Think or Swim platform, before you confirm a trade it tell you the max lost. In this case it will be your full amount. However, if you are right your return can be 4x (as one example) while your loss can only what you put in. It's a trade off essentially, you can multiple your money with little money without having to wait for your stock to multiple 4 times, which likely will not happen, so your "spreads" will help you get you there. You still can monitor the trade everyday and pull out before you ever get a full loss or before a multiplier.
Phenomenal tutorial Danielle, thank you!
No problem with sound here. Great video, thanks
This was really great, thank you! Much easier to follow visually and understand than your other one, and that one was pretty good, too. It has really opened my eyes to the possibilities! Just put on my first 'Fly on SPY today and hoping to test the waters on SPXW once things settle down a bit. Keep putting out the great content, Danielle!
Thanks Danielle!
Excellent !!! You explained it so well. Thanks 🙏
how difficult the trade executions are... how far from MARK price are they getting filled?
So much value in this video! Thank you!
Excellent Info. - much appreciated..
Great info, well presented. Thank you!
U Rock!
Do you actually show what ic and butterflies you're trading on Twitter?
Very informative. Unfortunately the sound is very gratey & echoing making it hard to focus on the content.
Yes, she’s not wearing a microphone that would help with reverberation. Sounds very tinny.
Great Stuff…
Expiration time?
3 weeks max.
Great video,very informative, thank you! Just 1 small advise: buy yourself a good voice microphone to make your vids professional. Your sound is really bad, made from your living room. Good luck!
this may sound like a stupid question but, if you set up a butterfly,
and you are in the green, can you close it early to take profits like a
regular call or put option; or do you have to hold it until expiration?
Thanks in advance if anyone answers
you can sell it back anytime, and take the profit/loss. Thing with butterfly is timing, because it won't pay much far from expiry date
Have you been trading these butterflys? I just started this week scalping with success.
,I think women do a much better job getting to the points then dudes babbling about bull flag, bear trap lol. Great video and thank you.