Spreads versus Butterfly

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IMO the BWB is the best long option strategy for short term trades to try nail MAX profits, otherwise I would do vertical spreads. Butterflys are the worst performer....slightly lower risk than the vertical spread, similar profits but LOW probability.
 
2rosy said:
why not sell it and collect $
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That's what I was thinking...all you are doing by converting is narrowing your profit window, and creating a 2nd break even leading to losses if price continues to go your way...maybe convert to a broken wing to try to bump profits? I never adjust or manage my positions...pretty much set it and forget it.
 
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Too lazy too figure it out,so can you tell us what strikes tge Vert and BWF is??Judging by your payoff diagram,ild take the Vert over the Fly all day ong.Are you sure those prices are right??

wxytrader said:
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IMO the BWB is the best long option strategy for short term trades to try nail MAX profits, otherwise I would do vertical spreads. Butterflys are the worst performer....slightly lower risk than the vertical spread, similar profits but LOW probability.
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The green is the MAX profit zone for a vertical spread, the red is the total profit zone of the butterfly @ expiration...above or below this zone you lose money.

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Dude. What happens to a ATM vertical when vols rise? And what about ATM flies? There is no edge in structure (for you, anyway). If you can't answer those questions w/o a what-if simulation then you need to stop. Well, generally you should stop. And the position templates are amateurish.
 
poopy said:
Dude. What happens to a ATM vertical when vols rise? And what about ATM flies? There is no edge in structure (for you, anyway). If you can't answer those questions w/o a what-if simulation then you need to stop. Well, generally you should stop. And the position templates are amateurish.
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I made $407.22 on a vertical spread yesterday...would have got the MAX today but whatever just trying things out while my funds are stranded....I'll probably do a ratio spread on Monday.

Amateurish??? They just proved you correct! I've made some improvements so now all strategies can be selected via a drop down menu and auto populated for efficiency. :)

https://www.elitetrader.com/et/threads/stock-repair-strategy.380565/page-6#post-6003674


poopy said:
Long 100 shares -> long put at x -> short two calls at y -> long call at z.
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It works! This is with the setup D explained...you know your shit lol...I'm equally impressed with the output of my spreadsheet :)

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Stocks gains/losses added in
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And here it is just as a regular fly:

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First is short the backspread and second example is long the backspread. They are the opposite of each other that’s why different answers.
 
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