How to Expand the Profit Zone on Butterfly Trades

The most popular options strategy on SMB's options trading desk is the butterfly. In this video, we walk you carefully through a professional adjustment that is used to extend the profit range of a butterfly and have plenty of profit remaining in the trade, expanding your chances for a win significantly.

#smbcapital #stockmarket #daytrading

[merlebeck]

I am a learning every day understanding Options. What I am getting from your webinars is there is always an Option(No Pun Intended) to fix an Option if it goes Sideways. This is why I would like to learn more. Thank you

[InfiniteQuest]

@ 6:20 slides do not match the setup seen in the trading window.

[mem]

the slide at 6:15 does not match the trades in the matrix, But otherwise well presented, thanks

[gregdolley]

Seth - that slide at 6:15 has a huge copy/paste error. Looks like it was copied from the broken wing butterfly video and numbers modified, but the description on each row is clearly wrong. Looks like it wasn't updated after pasting.

[brucedennis]

I really like the options videos and have been very well done and helpful. Never really thought about making an adjustment by putting on a fly within an existing fly trade. Very nice.

[Berelore]

Why not roll up the untested put side for increased credit?

[InvestingMadeEasy]

Thank you for the interesting video. It is an interesting way to adjust an iron butterfly. However, what you did not explain is that after adjustment your risk increases should the share price continue to go up and go well above the $2, 825 in this example. At the start your spread is $100 and you get $66.23 in premium per share so your risk per share was $100 - $66.23 = $33.77 so $3377 in total. After the adjustment your spread is still $100 but now you reduced your premiums from $66.23 to $14.84. Your new risk per share is then $100 - $14.84 = $85.16 so $8516 in total. That is a significant risk increase. That is fine and it is still an interesting repair strategy but am I correct that it increases the risk or am I missing something?

[edwardolivares]

Love these videos but why do the strikes show 100 points wide then 25 points wide?

[douglasteachout]

What is the DTE of the original trade?

[viviane.]

Very NICE VIDEO AND INFORMATIVE. Reduced the overwhelming feeling of Butterfly trade set-up. Need to w as tech the video a couple more times to be very comfortable we with the set-up.

[nathanielwilliams]

Explain the diagonal and calender spreads please

[scottmusick]

Seth, I’m curious how much did the capital requirement increase when you applied the adjustment to Iron Condor. Thank you!!!

[MartinMartinez-vxqw]

I really feel like slapping myself for not realizing that I could have been trading iron butterflies and just converting them over to iron condors when they turn sour.

[eliav]

Hey, what kind of stocks are Iron Butterfly suitable for before reports?

[XSKLTON]

I never thought that a butterfly can be rerolled and become an iron condor. Great video

[zeyadb]

Very informative. Would you be able to do the same, a put side butterfly, if the trade went sour in the other direction?

[quicksolutions]

Numbers all mixed up - anyone paying attention here??? SMB get your numbers right plz - great strategy messed up by poor presentation

[yougosquishnow]

Aren't index options European style?

[TheLordtaiko]

Could you just buy back the short and sell a higher short turning it into a debit spread cheaper?

[tjadd]

Hi. Have you heard of the reverse Harvey adjustment strategy for iron butterflies...I think it's better than what your suggesting