Has anyone used the "Bearish Butterfly" strategy with any degree of success?

Quote from darkshogun:

.....A butterfly would seem to be an absurd position to consider buying if it's not to be adjusted during the life of the trade.
More...

Not so if it is part of a long series of such trades as long as the overall statistics work out in your favor.

Having some losing trades is inevitable and if you try desperately to rescue them you may just be throwing good money after bad.
 
Quote from darkshogun:

I take that to mean don't sacrifice risk/reward ratio for a greater probability of winning the trade? Also why do you not like adjustments or rolls? A butterfly would seem to be an absurd position to consider buying if it's not to be adjusted during the life of the trade.
More...

lol, I don't adjust flies, or any other option position. The only caveat would be some explicit gamma-trade, such as an ATM synthetic (straddle, etc).

Avoid adjustments.
 
Quote from noregrets:

By way of background, Atticus has posted two very educational journals where he trades butterflies:

"atticus' single-name delta book"
http://www.elitetrader.com/vb/showt...=6&pagenumber=1

"atticus' 'ship it' vol trading journal"
http://www.elitetrader.com/vb/showt...trading+journal

I learned more from these than anything else on ET to date.
More...


Thanks for your reply. I tried to access the links but they aren't working. Could you or Atticus post some working links to these articles?
 
Quote from darkshogun:

Ok, these trading journals are beyond me. I want to stick to a relatively simple strategy on indices.
More...

I doubt that any very simple strategy will be profitable (educational webinar hucksters notwithstanding). But it is certainly a great starting point for testing.
 
Quote from newgptrader:

bunch of idiots gathered together ,I have bmw 4,8 complicated beast ,f... that I want raw power without that complicated shit,this bimmer every second week in shop,ttooo complicated
More...

get a gen 3 cam'o, 305, tbi, blows doors off most, simple to work on, i rescued mine from idiots, 1k and 1k to correct their folly, and its the best cheapest fun i ever had.

and i have had gasser ford big blocks, corvettes, gto's (still have a 68 rag), poncho 455's, beemers....
 
Quote from darkshogun:

...A butterfly would seem to be an absurd position to consider buying if it's not to be adjusted during the life of the trade.
More...
This is where understanding that "adjusting" is simply adding another trade to the mix. The addition of a fly as the underlying moves up is telling the world that you now think that the spot will terminate at that higher level in contrast to your prior view that spot would remain lower. You now have 2 positions on, even though you may not be able to "see" them both. Thus, you're adding more potential risk to your trade. If that's okay, then go for it. The responses you're receiving are simply reminding you of that stance. You might start with an ATM fly with only a small fraction of your trading account with the idea that you'll add positions as time passes. Just remember that if you're lucky, the positions will mature and you'll have the opportunity to unwind profitably at some point. Don't miss that moment. And realize that sometimes price movement will be so severe that you can't use this approach successfully. Stress test this possibility before you use your hard-earned money.
 
You must log in or register to reply here.
Back
Top