It's been quite a pump. But you know, with crypto, the big question is always when to take profits. What are your thoughts on that? I've been holding $250k worth of crypto since 2021 and seen it pump n dump
I've been keeping an eye on the charts, and it does look like a major breakout. The real challenge is predicting when this pump will end. Timing the market can be tricky.
Right, when it comes to situations like this, it's ideal to engage in various options using an advisor, and I can attest to success of the basket approach seeing my portfolio grow from $350k to almost $1m in barely 3 years, by far my best financial milestone.
I use Iron condors frequently which is similar. What I often do is if the price action penetrates the short put or call, I use indicators like the MACD and the TNN Squeeze to signal if the price is going to continue in the current direction. If so then I close that part of the trade and let the long option ride. I did this today and turn what looked like a sure $1600 loss into a $300 gain in about 15 minutes. BTW nice video but it would be MUCH easier to following if you used charts to illustrate your actions.😀
I'm thinking of putting some cash in stocks, I was at Salt Shack and I overheard some friends saying it's ripe enough, but Is this a good time to buy stocks? I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?
Hell yeah brother! We call that the instant millionaire play 😂 the only trouble you'd have after that is having to pay out such a big tax bill on all those sweet easy gains
Stay away from ODTE. Trading 0DTE is the best way to go broke quickly. 0DTE is a myth, fashionable nowadays. You cannot make money with this strategy in the long term. Market volatility will ruin you. This strategy is very suitable for brokers who will earn a lot in transaction fees, at your expense. Instead, invest your money in reputable stocks that pay constantly increasing dividends and forget about options trading. Becoming a pro in the world of options is a long road, strewn with pitfalls. Besides, those who educate you in this world are generally at the head of brokerage firms because the more you trade, the more money they will make with transaction fees. You will find very few true professionals who are independent, not affiliated with a brokerage firm who will teach you the real tricks of option trading.
The timing on this is imperative. What time do you generally enter the trade? 10am-11am, 11am-12 noon, at the open? Also rolling will only work up to a certain time in the day as well. Rolling after 2PM or so is not going to get you the premium needed to stay profitable in many cases especially if the VIX is where it has been in the last week or so. Finally, SPX closed at just below the short call strike but how much heat are you willing to take at that point, because if it hovered around the short call strike for a while (or above it) you are taking a ton of heat. What is the rule from that point. I suppose these are rules we all have to figure out ourselves, but it would be beneficial to discuss them as well.
@@figh761 at the beginning it was 3000 per contract minus the 1515 he took in, so $1485 is max loss if you did one contract. he did 5 contracts so multiply everything by 5 (he took in 7575, so -7425 would be max loss. so if you put it on, fell asleep until the market close, took no actions and it passes the protective put or call you would hit max loss. a better example might have been if he just did 1 contract, rather than 5, then just said its scalable
increased losses for portfolios this quarter are predicted by market drops, skyrocketing inflation, a major interest rate hike by the Fed, andI rising treasury rates. How can I profit from the volatile market right now? I'm still considering whether to sell my million dollar bond and stock account.
True, I’m quite lucky exposed to personal finance at early age, started full time job 19, purchased first home 28, got laid-off work at 36 amid covid-outbreak, and at once consulted a well-qualified advisor to stay afloat. Thankfully, my portfolio has maintained steady growth ever since, amassing nearly $1m after subsequent investments to date..>
Nicole Desiree Simon is the advisor that oversees my portfolio, she's an extremely intelligent person, very thoughtful, cautious, and has a great deal of expertise, it's easy to find her on the internet.
She appears to be a true authority in her profession with over a decade of experience. I looked her up on the internet and skimmed through her site, very professional.. already sent her an inquiry hoping for a response soon..
By far the biggest gem u guys gave me was that iron butterfly on spx. I scalp spx but lately it only moves 40 each way. I backtested it last week and no days were red. I let most exp and before today the least made profit was 940. Today exp $5 which was a surprise. I thought red but I closed out my trade before 12. I stayed patient for spx to come back down and hit 55% to net 1200. Now usually I trade 1 lot to risk 5k to make max 2500. Today I went two lots risking 14k to possibly make 5k. Horrible RR but I managed to still be green and took home 1200. Yesterday was the first day I went live with this strategy. I usually have my order set on tos before market opens. My goal is 55% anything higher is just icing on the cake
How to determine that 30 points away for both wings? Why not 40 points or 20 points? Does it refer to the support/resistance or Delta or something else? Could anyone explain please? Thank you in advance.
This is a horrible trade. One will battle every 15-45min swing. Dig a hole on one side then dig a second hole on the other. Very stressful. One runs out of time (theta to sell). One could roll into the next to keep the nightmare alive.
0DTE trading is a suckers game. You don't need to even try it, just do your analysis, play with the numbers and you will see that there is no way you can extract any systematic profits with it.
Agreed. With intraday action so random, it is impossible to derive any kind of dominant strategy; the same strategy providing profit one day may give it back and then some the next
An interesting stategy but the video is confusing. At 4:50, the slide shows buying 10 puts at 3500 as well as buying 5 calls at 4170 and 5 puts at 4110. I have no idea what happened to the 10 3500 puts. Also, had they not had to perform the "butterfly roll", but the index went up a significant amount, the net income would have been a lot less.
I agree, saw no need to add that in the frame. Must have been a Clerical error! Also there was a line that said "Selling 5 4140 CallsPuts? Think just Clerical errors. But its all great information!
You will get absolutely destroyed on big swing days which are common these days…you roll 2 times on one side then 2 times on the others side and build up a nice fat loss for the day. Backtested without the rolls and the trade by itself is a big loser.
This is exactly what I've been looking for. I'm not US and I don't trade stock so have to make do with Bitcoin and Ethereum. They have their pumps and then are flat for quite some time. I think this could be perfect. Great video. Took a few views to sink in but I have a good enough foundation to now put it into practice, so thanks very much.
Couldn’t you have also rolled the put side up for a credit (even though smaller than the debit for the call roll due to the lower delta) to increase profits here? Of course the market could turn around and you would possibly have to roll both sides down, but overall wouldn’t that be more profitable?
After the roll price went extremely close to the short strike of the Call leg. The loss would have been significant if the trade would have expired with the short strike being breached.
Hello, thank you for the video and the strategy. I took an SPX position following this strategy but when it got to having to roll, the cost of the new spread was more than what had been received initially entering the iron butterfly position. So there was no credit left as a profit. How did you end up with a profit in the trade you talked about in the video? Thanks
To do all this you need min a 10k account or margin and level 3 options level correct? I get you can manage the trade on the fly just need to know what I need to be able to use all these strategies
Hey Seth. Always enjoy your videos. I can do this as an Condor but if I try an adjust by selling the long or short positions, depending on direction as the day proceeds, and turning into a Butterfly the Margin Explodes! I will try it tomorrow on Paper Money and see if I am correct regarding the margin. Certainly is intriguing!
He probably should have made it clear that the 30-point distance was just an example. I would imagine they look at the daily expected move based on volatility to determine each day's point spread.
"call butterfly roll" pays more debit than the original short call credit. The example ended up with making profit because it did only one time "call butterfly roll". If the market turn around and roll over right after the "call butterfly roll" and drop below 4110 which would make the short put spread ITM or you would have to do another "put butterfly roll". So, the idea of "butterfly roll" is good sine it close the "would be ITM" call and sell another call spread. But if market is chopping up and down, not sure this method would still make money. Then what to do ? Another stratety ?I'm just learning. Advise would be appreciated very much
As with most other strategies, you would want to apply a stop loss. In your example, the trade would be in trouble for sure, and eventually it's better to just take the loss, walk away and live to trade another day. Not every trade will be profitable, and learning to take the losses while they're small is key to long-term success. Also, the more you learn, the more you can stack the probabilities in your favor. For instance, this particular strategy would benefit greatly from intraday technical analysis to know when/where to perform that roll.
Thanks for the great content! Wondering if you would really allow price to close that close the call credit spread? What would be the difference if it closed at 4170 instead of 4169?
@@figh761 This is a really bad strategy if you're very bullish, the iron butterfly gives you max profits if the price of the underlying doesn't move at all: -_/\_- . When you roll the iron butterfly into an iron condor, you're effectively reducing the peak but expanding the range -_/¯¯\_- . (- being the line where you make 0 profit/loss). If you're very bullish you might want to buy a naked call to provide you with leverage. (Not financial advice)
Has anyone tried to fix the losing trade? I tried, but it was not a winning trade even with a small profit as the video mentioned. I think the problem is that when one side leg is tested, you will already be at a loss depending on how fast or slow the stock moves. So, if we close that leg and turn it into an IC, the loss you already had is bigger, and it will be hard to cover the loss and get a small profit even if the stock moves within the IC short legs. Has anyone tried his rolling?
Nice. I am learning a lot of good stuff here. I know option strategies but I always keep finding something new. I have to test this butterfly to condor rolls. Will do some test trades and see how it goes. Thank you for this.
is this same as iron condor? or different? is there any risk involved in this method? For example, what if we are unable to fill the rolling trade at the last moment due to theta decay?
The difference between an Iron Condor and Iron Butterfly is simply that both the Call and Put shorts are at the same strike in an Iron Butterfly. As you see at the 5min mark when he enters, both call and put shorts are at the 4140 strike. And yes there are always risks involved in all strategies. If you didn't get the roll filled, that initial butterfly would probably be hurt. However, getting filled is only a matter of what price you're willing to accept. "I couldn't get filled" is not an excuse, just greed in execution :) Especially on SPX where there's tons of liquidity.
He initially bought 5 4170 calls for the 4140/4170 credit spread, so he had to sell the 5 4170's to close the initial spread; then he did another credit spread 4170/4200 in which he sold another 5 of the 4170's, which makes it 10 in total. Buy 5 4140's, sell 5 4170's to close. Sell 5 4170's, buy 5 4200's to open. Makes sense?
He does explain it but perhaps better said, he is doing a Sell To Close the original 5 protective CALLs and a Sell To Open 5 new CALLs for a total of 10 Sell transactions.
No way this roll would be a credit in real world scenario. If the price goes past your call strike, chances are the roll is going to be a debit. This video is just rolling before the call strike is breached, hence they imagined a credit.
All options bets are odds/probability/gambling. You will lose some, but if you bet with the odds you'll win over time. Your winners should win by enough to pay for all your losses and have profit.
Excellent quesion. In fact we crossed back under 4140 at 11:00 A.M. This should've required another adjustment or a close out at loss before lunchtime. I can't imagine they just go hands off in that situation with 5 hours left in the session...
This strategy would likely be far more consistent if you trade with p/l targets. You would want to put your wings around 1 standard deviation and exit with $2000 profit, or $4000 loss. Mind your support/resistance levels, and avoid trading on big news days. The rolling is a nice option, but you'll get killed with commissions if you're not careful.
Except that he doesn't address dropping below 4140 at 11:00. Luckily it bounced back, but that opened the door to a major loss and should not be ignored
they are doing credit spread(s) via the individual legs here and are net sellers of premium therefore you want value to go down due to theta. if you're buying spreads on 0DTE, you still mitigate theta loss via your short strikes which will offset some of the -theta effect on the long strikes as the day progresses.
I lost 3000 dollars doing this strategy. He is talking non sense and didn't explain when to deploy a iron butterfly. My trade didn't cross both sell sides and I simply lost 3000 dollars
