Spreads versus Butterfly

.sigma said:
One thing about flies--it's a tool. There are modalities that dictate fly vs. calendar. vs. whatever. You don't buy calendars if you're looking to trade gamma. There are better choices to isolate gamma. Flies are my go to because of the granularity and ability to embed. why buy an ATM 70 call at 3.30 when you can buy the 70/80/90 fly for 1.80?
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Now where have I heard that before ;)
 
Where is the stock trading and how many days till expiration in your proposed?

It appears you are talking direction

I'm guestimating the Fly has a delta apx < half of the Call,and if dead right on direction,the fly is a loser..

Details please




.sigma said:
One thing about flies--it's a tool. There are modalities that dictate fly vs. calendar. vs. whatever. You don't buy calendars if you're looking to trade gamma. There are better choices to isolate gamma. Flies are my go to because of the granularity and ability to embed. why buy an ATM 70 call at 3.30 when you can buy the 70/80/90 fly for 1.80?
More...
 
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It was just a random example.

Whats your opinion on buying outright calls/puts verses OTM flies for strictly directional bias?
 
What a difference a few days make! Gotta love the theta crush on flies.

AUG23 16/17/18 Call Butterfly

Pnl @ 16.93 (open) $80.69
Pnl @ 16.93 in 3 days $730


Look at the profit window @ expiry...all you have to do is pick where price will be a week from now? Why am I not doing these every week? It's like shooting fish in a barrel!

$16.30 --> $100.00
$16.40 --> $200.00
$16.50 --> $300.00
$16.60 --> $400.00
$16.70 --> $500.00
$16.80 --> $600.00
$16.90 --> $700.00
$17.00 --> $800.00
$17.10 --> $700.00
$17.20 --> $600.00
$17.30 --> $500.00
$17.40 --> $400.00
$17.50 --> $300.00
$17.60 --> $200.00
$17.70 --> $100.00
 
wxytrader said:
So I could straddle/strangle the fly
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eh that sucks!

upload_2024-8-20_7-51-4.png
 
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