Studying LongPutButterfly

Q

Quanto

I'm currently studying LongPutButterfly (my construct), and reading some WebSites.
The following site has written much about it:
https://www.strike.money/options/long-put-butterfly

...BUT: I think it has some of the core elements wrong, like the formulas for MaxProfit and MaxLoss... :)
so then the rest of the long article becomes of course "very suspect and dubious"... :)

Additionaly it says this
The long put butterfly and the 1-3-2 put butterfly are different names for the same options trading strategy. ... The core strategy and structure are identical between the long-put butterfly and the 1-3-2 butterfly. They have the same profit/loss profile – limited profit if finishing at middle strike, defined risk outside wings.
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This statement is IMO BS! :)

Why-o-why is the Web full with such buggy and misleading informations? :)
 
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BKR88 said:
Show the math that proves the article/statement is wrong.
I'll make a guess that you can't/won't do this. :)
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I can and will do.
But are you saying this statement of him is correct? I doubt. :
The profit is limited to the net credit received when initiating the trade.
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The ball is in your court :-) I'll wait for your answer... :)
 
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Quanto said:
I can and will do.
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Highly doubt it.

Quanto said:
The ball is in your court
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No, it's not. I'm not the one making claims that the article is wrong.
I didn't read the article so don't know what that one statement is referring to.

This will be your diversion/excuse as to why you won't show the math.
Truth is, you CAN'T show the math. Prove me wrong.

Reason I doubt your claim?
Here I tried explaining a covered call. You were concerned the broker could "steal" something from you. :)
https://www.elitetrader.com/et/thre...our-short-position.377571/page-2#post-5906820

Here I had to tell you a DITM call (Delta 100) has no extrinsic value.
https://www.elitetrader.com/et/threads/a-trading-idea.378209/#post-5922861

Here I told you your prices made no sense but you still claimed your "tool" works fine but you couldn't look at the prices and see they made no sense.
https://www.elitetrader.com/et/thre...-of-2-coveredcalls.377906/page-2#post-5914316

If I had to put money on it without even reading the article, I'd bet on the article being correct.
 
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BKR88 said:
Highly doubt it.



No, it's not. I'm not the one making claims that the article is wrong.
I didn't read the article so don't know what that one statement is referring to.

This will be your diversion/excuse as to why you won't show the math.
Truth is, you CAN'T show the math. Prove me wrong.
More...
You are a bad team player, man! :)
And: I already have proved it! --> I've set up such a trade and have added the link of it into the OP.
Just look there and see that the said statement is wrong b/c it does not reflect the reality.
Here the link again: https://optioncreator.com/strw45b
He even says wrongly "net credit", instead of saying "net premium" to cover all posible cases.
 
Quanto said:
You are a bad team player, man! :)
And: I already have proved it! --> I've set up such a trade and have added the link of it into the OP.
Just look there and see that the said statement is wrong b/c it does not reflect the reality.
Here the link again: https://optioncreator.com/strw45b
He even says wrongly "net credit", instead of saying "net premium".
More...

Going back to your stupid tool that I proved doesn't work because you can't do the MATH.
***My last comment on this thread.
 
BKR88 said:
Highly doubt it.

No, it's not. I'm not the one making claims that the article is wrong.
I didn't read the article so don't know what that one statement is referring to.

This will be your diversion/excuse as to why you won't show the math.
Truth is, you CAN'T show the math. Prove me wrong.

Reason I doubt your claim?
Here I tried explaining a covered call. You were concerned the broker could "steal" something from you. :)
https://www.elitetrader.com/et/thre...our-short-position.377571/page-2#post-5906820

Here I had to tell you a DITM call (Delta 100) has no extrinsic value.
https://www.elitetrader.com/et/threads/a-trading-idea.378209/#post-5922861

Here I told you your prices made no sense but you still claimed your "tool" works fine but you couldn't look at the prices and see they made no sense.
https://www.elitetrader.com/et/thre...-of-2-coveredcalls.377906/page-2#post-5914316

If I had to put money on it without even reading the article, I'd bet on the article being correct.
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I just watched again the above old threads and it's just you who did not and still does not understand.
Boy, it's you yourself who is wrong, not me, nor nobody else :)
Everybody can convince him-/herself.
As said, it seems you have some "character deficits", man :)
It's also impolite and against forum rules to try to distract the discussion by bringing old and off-topic issues into the discussion.
 
Without looking,Im guessing there is some confusion with Quanto and the strike distance on the call uppper wing..

Obviously,you can't have the same strikes on both structures as one will be a broken wing fly





BKR88 said:
Show the math that proves the article/statement is wrong.
I'll make a guess that you can't/won't do this. :)
More...
 
I just came up with this formula (not much tested yet):
MaxProfit = max(K_center - K_lower - NetPremium, K_upper - K_center - NetPremium)
Works also for different upper and lower strike distances from the center strike.
NetPremium < 0 means Debit, >=0 means Credit.

 
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