Introducing: Weekly Returns With Butterflies
It has been four long months in the making but I am extremely proud to finally announce my long awaited course on trading butterflies. While Options 201 was mainly focused on ‘structure’ and how to create, price, and analyze vertical as well as diagonal spreads, this new course dives deep into the ‘criteria’ of trading butterfly spreads successfully on a weekly basis.
Most option traders already know how to create and place a butterfly spread as modern platforms like ThinkOrSwim make the basic mechanics fairly easy.
What the majority of traders however do NOT know, and where most of the educational material you find on the topic fails to deliver, is how to MAXIMIZE your edge by constructing a fly that has high odds of banking any coin come expiration day.
So once again I dug deep and started producing a course that not only teaches you the basics of how to analyze and place a butterfly. Much more importantly it introduces you to a comprehensive systemic approach for trading butterflies successfully while conveying important fundamentals related to trading options that will accompany you for the remainder of your trading career.
So What’s In The Box?
In the first chapter of this class, I cover all of the core fundamentals of how to properly construct and analyze a butterfly spread, how to deconstruct it into its core components (i.e. vertical spreads), and how to assess your risk and profit basis. If you have not bought Options 201, don’t worry as I spend plenty of time in covering the basics.
Although you may have traded options and perhaps even butterflies for many years already, odds have it that you have never been taught basic probability calculations and spread tactics that form the basis of successful options trading. This course quickly remedies all of that and then dives deep into specific trading criteria I have developed over the course of many years.
To that end the remaining chapters of this series focus on why you would trade a butterfly in the first place and how to do it profitably via a clearly defined edge on a weekly basis. Many of the techniques covered in this course, aren’t even taught anymore, as most of the contemporary material merely focuses on the structure and theory of butterflies but not on actually how to make money trading them.
Until now! This is your opportunity to learn how to trade butterflies ‘the right way’ and in the process elevate your trading career as a whole to the next level. Even if you are an experienced options trader I guarantee you that by the end of this course you will have learned something new and valuable that will aid your daily trading reality for years to come.
Probability Of Profitability (POP)
Once you understand the basics of trading butterflies from a ‘probability of profitability’ perspective, and of course assuming you can get your head trash out of the way, this course will completely change the game for you.
And I’m not just pulling that out of my rear side – many years ago when I was taught these same concepts I never looked at the market the same way ever again. But at the same time none of the material covered is either brain surgery or rocket science.
Successful option trading basically boils down to this:
- Knowing not only the probability of success when sculpting your spreads but more importantly assessing your ‘probability of profitability’ which in fact defines your actual edge. This is a crucial concept you rarely hear about outside of professional trading circles and in this course I have devoted an entire chapter to this topic alone.
- Knowing when to get in, how to get in, and when and how to get out.
- Maximizing #1 and #2 through by selecting the proper spreads via clearly defined criteria.
Expected Move And Butterflies – A Perfect Match
Options and by extension option spreads like butterflies have risk and probability baked directly into them by default. There is no difference between perceived risk and the premium you see in front of you. This is a reality missed by most option traders who seem perplexed by the flood of information emanating from their trading platforms.
In this course I address this important topic head on by explaining how weekly expected move (EM) can be leveraged effectively to maximize profitability on a long term basis. None of the material presented is based on opinions, academic theories, or form fitted back testing. Instead this course squarely focuses on statistics and hard earned knowledge gained by trading a live market on a daily basis.
Increased Market Efficiency
Since the introduction of additional weekly expirations in 2016 option markets have become extremely efficient and thus more predictable. Which makes trading options easier IF you know what you are doing, what to look for, and of course understand how price and risk are intimately correlated.
In this class, I cover a long laundry list of fundamental topics related to trading butterflies:
- Why ‘market manipulation’ is a myth but ‘market guidance’ is an integral part of our trading reality we can actually take advantage of. And I will show you how.
- How you may have been trading options for many years but probably have missed out on one of the most crucial concepts driving the options market – and by extension the equities market in the 21st century.
- How to leverage weekly ‘expected move’ and take advantage of the increased market efficiency perceived over the past five years, which can lead to potentially explosive returns.
- How to deconstruct a butterfly into its essential components and how to calculate max risk, max profit, as well as probability of success.
- Why you should mostly ignore risk graphs and how to instead more realistically project your butterfly’s earnings potential.
- Which option contracts to trade, and when to trade them.
- Why you should stay away from quarterly expirations and focus on weekly expirations instead.
- Where and when to properly place your butterfly to maximize your earnings potential.
- How to properly price your butterfly within a clearly defined cost basis.
- How to pick a direction but at the same time why directional bias does not really matter.
- Bullish vs. bearish butterflies and how to trade each of them with the proper options.
- Picking the right width for your butterfly and how.
- Why you may want to shift or widen your butterfly and when.
- How to adjust your butterfly to specific market cycles.
- Reduction in buying power vs. margin and why it matters.
- Proper position sizing specific to your portfolio.
- Butterfly exit criteria and how to choose the most effective timing when closing your trade.
- Avoiding dangers and keeping your account out of trouble.
- Last but not least, probability of profitability (POP) which is the true secret behind trading butterflies successfully.
It is information you will want to revisit over and over again until it all becomes second nature. Once you have acquired the knowledge, nobody can ever take it away from you. It’s yours to keep for the rest of your life.
Months of hard work culminated in the most comprehensive guide to trading butterfly spreads profitably you are going to find.
So get off the damn fence and buy it now!