tell me more.
Are lottery Butterflies worth it?
- Thread starter Ironplates
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tell me more.
I’m kidding.
Flies are optically cheap but not really great lottery tickets because if you are right, they don't earn to their risk/reward ratio until expiry.
IOW, you will be happy if the stock goes to 5800 tomorrow, but you would likely have been happier if you just bought fewer calls outright.
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this 30x50x60 FLY for 2.75 appears to offer compelling return for the risk. i guess a straight up 30 call would be a pure play is what you're saying without the drag of the 2x 50 short holding the immediate gains hostage till expiry? but most options expire worthless. is that because most people suck at market structure and trade location?
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The clue is in the title question. For the 'lottery win' you need to consistently get direction right, magnitude of that move right, AND precise timing of that move right. Too far or late and you won't achieve it.
You need to backtest your entry and exit conditions to calculate whether you have an investable edge.
Whilst not exactly the same, the Swing trading with butterflies thread may be of interest.
You need to backtest your entry and exit conditions to calculate whether you have an investable edge.
Whilst not exactly the same, the Swing trading with butterflies thread may be of interest.
What stock is this and what Fly??
It sounds like you are a directional guy and quasi punting with options...
This is a 1x2x1 structure but you tightened up the short vertical to get long Deltas??
It sounds like you are a directional guy and quasi punting with options...
This is a 1x2x1 structure but you tightened up the short vertical to get long Deltas??
i am both directional and non directional. ticker is AI. the back end wing is shorter in case the price moves through the tent sooner than later.
not so much punting, just seeking better return for the risk and more notional leverage.
seems like $2750 for a Jan 25 leap to get the same thing as $25,000 of stock. i guess its renting instead of buying.
not so much punting, just seeking better return for the risk and more notional leverage.
seems like $2750 for a Jan 25 leap to get the same thing as $25,000 of stock. i guess its renting instead of buying.
For lottery, you are better off doing an DOTM single leg directional bet, stretch out expiry as much as makes sense.
Limited down side, unlimited up side.
going for the 505 break are you?
i wonder if the 480 to 460 zone might be a consideration too?