Weekly Iron Butterfly on SPY

Quote from ultramarathon:

You didn't put on an iron butterfly on the spy weekly. You put on an iron butterfly on spy a week before expiration.

If the monthly is about to expire, there is no weekly.

Optionpit.com (former student) put on free webinar on weeklies and getting in Thursday morning and out Friday afternoon was one of the plays.

Stephen
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I know that. Maybe that contributed to the position being down.
What about that free webinar? Do you have a link?
 
any update on the iron butterfly? i have seen some trades using the SPX and it looks interesting.

Quote from rocky_raccoon:

Hi there!

I've been observing weekly options on SPY for a while and I found that there is a very high probability trade in SPY weeklies.

On Thursday morning, sell a weekly Iron Butterfly such as 131/134/137 on SPY and close it on Friday afternoon or Monday morning.

The typical credit for this trade is ~$2/spread. The margin is ~$1/spread.

There is a good chance that the trade makes .10-.20 (or 10-20% return on margin in one day) by Friday afternoon.

What I am not sure of is the probability and size of the potential loss. I don't think that total loss (full margin) is possible in just one day but what is the reasonable amount of loss?
Also, what position size (% of account) is suitable for this trade?
Is 5% too big or too small?

Regards,
RR
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Non sense... Your premise doesn't make sense...... Your basically just shorting gamma or terminal distribution.... Your view on distro is always the same every Thursday?
 
Quote from cdcaveman:

Non sense... Your premise doesn't make sense...... Your basically just shorting gamma or terminal distribution.... Your view on distro is always the same every Thursday?
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OP -

Put another way, how likely is it that these exact options are consistently mispriced, essentially forever? Much more likely that some options are mispriced relative to some other options *some* of the time, and you can trade that. That *some* of the time being every Thursday seems pretty unlikely.


monkey
 
Quote from monkeyjoe:

OP -

Put another way, how likely is it that these exact options are consistently mispriced, essentially forever? Much more likely that some options are mispriced relative to some other options *some* of the time, and you can trade that. That *some* of the time being every Thursday seems pretty unlikely.


monkey
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thats exactly what i was point to.. put a little more clearly :)
 
I discarded this strategy a long time ago. However, the is a monthly Iron 'Fly strategy that has worked some 35 out of 36 times averaging 10% gains vs one 30% loss.
 
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