Swing trading with Butterflies

Opened a short position on Nasdaq with 21DTE:

Trade date: 20 August 2021
Security: NDX
Price at opening: 15083
Direction: Put
Expiry date: 10 September 2021
Strikes: 14350 / 14750 / 15550
Structure: 2 / 3 / 1
Opening Spread: 241.30

This is larger than I'm comfortable trading so I'll be watching closely, ready to close early if NDX rallies.
 
Do you find you favor the 2/3/1 structure on the put side due to the skew of the volatility. You're selling a body with a higher volatility? Do you trade this structure more often on puts than calls?
 
caroy said:
Do you find you favor the 2/3/1 structure on the put side due to the skew of the volatility. You're selling a body with a higher volatility? Do you trade this structure more often on puts than calls?
More...

Just checked my trade log to help answer this. I haven't got a statistically significant sample of unbalanced structures to draw upon, but whilst only about 20% of all trades have been calls (so 80% puts) the calls are evenly split between balanced 1/2/1s and unbalanced 1/3/2s.

I like the 2/3/1 structure but for a fixed value at risk there is a trade-off between buying fewer 2/3/1 put flies or more (cheaper) 1/2/1s. I adjusted my modelling methodology and am favouring 2/3/1s more recently but don't yet know whether this is a temporary statistical anomaly. I'll revisit the question when I've got a few more trades logged.

As an aside I've spent much of today looking at managing losing positions as there have been too many 100% losses since starting the journal. Half of all of these for the last four months occurred during August.
 
Global OptionsTrades said:
Just checked my trade log to help answer this. I haven't got a statistically significant sample of unbalanced structures to draw upon, but whilst only about 20% of all trades have been calls (so 80% puts) the calls are evenly split between balanced 1/2/1s and unbalanced 1/3/2s.

I like the 2/3/1 structure but for a fixed value at risk there is a trade-off between buying fewer 2/3/1 put flies or more (cheaper) 1/2/1s. I adjusted my modelling methodology and am favouring 2/3/1s more recently but don't yet know whether this is a temporary statistical anomaly. I'll revisit the question when I've got a few more trades logged.

As an aside I've spent much of today looking at managing losing positions as there have been too many 100% losses since starting the journal. Half of all of these for the last four months occurred during August.
More...
Thanks for the reply. I'm mostly trading one day flies (thursday close to friday open) so I close the losers very early after the open on Friday to try to minimize the losses and not take a full loss on any of them although it happens from time to time with a large gap away from or through my wings. I had a handful on 1:3:2 on yesterday.
 
caroy said:
Thanks for the reply. I'm mostly trading one day flies (thursday close to friday open) so I close the losers very early after the open on Friday to try to minimize the losses and not take a full loss on any of them although it happens from time to time with a large gap away from or through my wings. I had a handful on 1:3:2 on yesterday.
More...

Yes, I see you had a good week. :thumbsup:
 
Closed the short Nasdaq position from Friday after it hit ATH yesterday. There will be a better entry.

Trade date: 20 August 2021
Security: NDX
Price at opening: 15083
Direction: Put
Expiry date: 10 September 2021
Strikes: 14350 / 14750 / 15550
Structure: 2 / 3 / 1
Opening Spread: 241.30
Close date: 23 August 2021
Trade duration: 3
Closing spread: 201.05
Profit / (Loss): -40.25
Profit / (Loss): -16.7%

Also, I noticed a typo on the opening oil position (#40). It should have been:

Trade date: 20 August 2021
Security: CL
Price at opening: 63.34
Direction: Put
Expiry date: 27 August 2021
Strikes: 60 / 63 / 66
Structure: 1 / 2 / 1
Opening Spread: 0.93
 
Sharing this one although it is a paper trade. I couldn't enter it as a single order, and will be on holiday the week prior to expiry, and don't want to deal with several partial orders to close the position gradually. Here it is anyway quoted at mid-price:

Trade date: 25 August 2021
Security: DAX
Price at opening: 15892
Direction: Call
Expiry date: 17 September 2021
Strikes: 15650 / 16050 / 16250
Structure: 1 / 3 / 2
Opening Spread: 118.00
 
Andy ... apologies ... late arrival to this thread ... as you know, I am always interested discussing Wingspreads ... and am happy to chip in with ideas / feedback ... particularly if you are trading FTSE options

Couple of quick questions

#1 Where do you see the edge in a 132 -v- 121 structure ... maybe an example would be useful to illustrate

#2 How do you determine strike width ... for example ... I noticed some of your FTSE Flies strike width were 0.3% wide ( 25 points wide Fly -v- Spot 7000 )

Look forward to exploring further ...
 
The oil trade (#46) expired OtM at a total loss.

Placed a bearish position on DAX for next Friday:

Trade date: 27 August 2021
Security: DAX
Price at opening: 15817
Direction: Put
Expiry date: 03 September 2021
Strikes: 15300 / 15600 / 15750
Structure: 1 / 3 / 2
Opening Spread: 62.00
 
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