- This topic has 3 replies, 3 voices, and was last updated 8 years, 1 month ago by .
Viewing 4 posts - 1 through 4 (of 4 total)
Viewing 4 posts - 1 through 4 (of 4 total)
- You must be logged in to reply to this topic.
Become a Great Options Trader
Home › Forums › Income Trades › Scaling Butterfly in RUT
RUT broke to new all time highs today and hit the upper bollinger band. Now’s a good time to start scaling into some income trades.
Here’s the trade:
Buy to open RUT May 1180/1230/1280 put butterfly @10.80 or lower
Here’s a chart of the bid/ask spread and possible fills:
I’m seeing trade prices ranging from 10.40 to 11.00. I think if you start at 10.50 and work your way up, you’ll get filled.
If this is too much size, you can do the same thing in the IWM — May 118/123/128 put fly.
On a 25 point move higher, we will add another round of butterflies.
Hi,
What is the potential loss and profit on this fly.
Thanks,
James
The red lines from the TOS analyze tab show you the max profit / max loss
of the trade at expiration. The white line is the current profit/loss.
A standard fly can only loose what you pay for it. So if you get it for 10.80
your max loss is $1080.
This trade is up around 20% and we’ve got 30 days left to expiration, so this is the right time to exit out.
Sell to close RUT May 1180/1230/1280 put butterfly @ 13.50
If you *wanted* to try and milk it further, you could simply buy some Jun call spreads to hedge your upside risk.