Butterfly legs - Futures

[Andhesaid]

Hi,

I am finding it challenging to get information on how futures butterflies make money?
I was looking at a recommended trade to go long ZS HKN 18. I have googled it and most of information about butterflies relates to option trading.

Any help would be appreciated.

Thanks

 

[Pekelo]

There are options on futures, probably that's what they meant...

 

[H2O]

There are options on futures, probably that's what they meant...

What makes you say that ??? Butterflies (and spreads Etc.) are used almost exclusively when trading certain products like STIRS, but are also very common in Agri.
To answer the original question - butterflies are generally used to trade curve changes / anomalies. Read up on STIRS to get a deeper understanding. There are some good books on the subject (Steven Aikin is one of them - pretty old, but a good outline)

Hope this helps

 

[tommcginnis]

http://www.cmegroup.com/confluence/...+Spreads#FuturesSpreads-Futures-Butterfly(BF)

 

[Autospreader]

No offense and not trying to sound like most of these "elite" traders but you shouldn't try and trade something you don't fully under stand

But I will try explain. Say you go in a soy hkn spread you will be long or short the middle and opposite of wings you will profit if they get further apart or closer together depending on how your positioned

 

[Andhesaid]

What makes you say that ??? Butterflies (and spreads Etc.) are used almost exclusively when trading certain products like STIRS, but are also very common in Agri.
To answer the original question - butterflies are generally used to trade curve changes / anomalies. Read up on STIRS to get a deeper understanding. There are some good books on the subject (Steven Aikin is one of them - pretty old, but a good outline)

Hope this helps

Thank you for this I will certainly read up on it.

 

[Andhesaid]

No offense and not trying to sound like most of these "elite" traders but you shouldn't try and trade something you don't fully under stand

But I will try explain. Say you go in a soy hkn spread you will be long or short the middle and opposite of wings you will profit if they get further apart or closer together depending on how your positioned

Thanks for the advice but I don't intend to trade it until I fully understand how it works. I want learn and read more about before I trade one.

 

[Autospreader]

Thanks for the advice but I don't intend to trade it until I fully understand how it works. I want learn and read more about before I trade one.

I would start with the Ags, Grains, Cattle etc. I trade flys all the time in Cattle.

Your on the right track atleast your not trying to day trade the Indices.

Check out Seasonalgo.com for seasonality studies on spreads.

Good luck