Yep, some of this can be quite difficult to take in, you really have to pay attention to detail, be good in basic math, and have good multi-tasking skills. And for anyone who is just getting started on their own in stock trading shouldn’t be using this strategy. Just learn how to buy low and sell high on swing trading for a bit. Do your research, have a good spread of stocks, don’t just put your money in just 1 particular stock, have 5 to 8 stocks, put a few of them in low risk that you wouldn’t mind holding on to for long time, and practice on 1 or 2 stocks to research in and play with. Buy in low sell high, get out. Buy in low sell high, rinse repeat. You can make money, it will take a little time to build up a good amount of money, but over time, of sliding funds into your account, and mixture of learning on how to buy low sell high with 2 stocks you can graduate to doing this with 3 different stocks, 4 different stocks, and so on. But, this is what I’m doing for now, this strategy of trading options can be done on the think or swim platform for practice. The main thing I’m getting at is be cautious and thing logical.
Being new to trading options I would love a step by step tutorial on how to place a broken wing butterfly and other option strategies. It’s difficult to tell where the calls/puts are in your video but I love the instruction. Seth is an excellent trainer and really breaks things down into an easy-to-understand explanation.
The workshop goes over Credit Spreads and Iron Condors.Its pretty clear and easy to understand. In short if you have a small account, don't waste the 2 hrs. 30 mins is spent hyping up their own legitimacy at the beginning, 30 min at the end offering their 6 -8k video course.
Then wait till you try out Mr Fabian, his trading strategies and investments techniques are top notch and you're rest assured of making profitable returns with him. He's a verified and proven trader. By far the very best I've ever worked with. You can réåch him on * fabianconner770 ⓐ gmaiI, com *
Honest and glaringly straight to the point. There is no magic ATM machine out there. And, you will face losses. You will need $62K in capital/margin to make $52K or 81% returns, with losses, based on where the option is headed. This BROKEN WING BUTTERFLY strategy on the SPX index is definitely for intermediate to expert traders. Thank you Seth Freudberg.
@@tylerrb1937 Honestly age has nothing to do with it. If you can understand the nuance of the trades and do the math, you should be fine. One thing you must do though is keep wishes and ego out of your decision making process. This is not place for wishful thinking... you must be disciplined, follow the strategy to the letter, understand there will be losing weeks and budget for the weeks you will lose money. Because those weeks will come.
I always cut the trade if it loses as much as I'm looking to gain. Keeping a 1:1 risk reward ratio on known max gain trades is paramount for me. I like your teaching and presentation style.
It would have to be 1:1 or at least something approximating that ratio, because if you took a loss of $2000, as was stated during the broken butterfly strategy, for approximately 20% of the time, within a year, you effectively make nothing. Am I missing something or does this make since? I'm new to this btw, just trying to understand.
You will still be in profit. Out of 10 trades you lose 2 x $2000 (20 percent) = - $4000.00. You win 8 x $1000 (80 percent) = + $8000.00. The difference is $4000.00.
Hello Seth Freudberg! A retail investor with a small account (under 5K) would rather do a different technique. A "naked" PUT option for example for this week of March 1 thru 5 2021 on WKHS and RKT. An investment of 14K will bring an awesome return. Thank you for not telling me that is a very dangerous game (naked options). I've learned it hard way.
This was great, thanks, I've been looking for "options trading program" for a while now, and I think this has helped. Have you ever come across - Winoorfa Option Olegroson - (do a search on google ) ? Ive heard some incredible things about it and my work buddy got cool results with it.
Start small and slow. Butterfly's are more complex. Start with Vertical Spreads, Iron Condors, and an occasional Naked Put/Call on VERY low priced underlying ($20 or less). Start there and then move onto Strangles, Straddles, Iron Flys, Diagonals. Finally, Butterflys and other things. Also there are futures as well.
Same. Not ready to try this yet and I have an honor's degree in Economics and Accounting with a minor in applied math. Yet, is the key term here. We will get there.
I have just started a Options class I paid $900 for. I thankyou for explaining with as little as $65,000 i can make $48k +/- a year. At present I make 16 % on $200,000 or $32,000. So your numbers are interesting to me.
At 13:20 their is an invite to a webinar to learn 3 options strategies. In the said "webinar" this is how it goes: +- the first 30 minutes of the "webinar" is about how great SMB is. in +- the next 60 minutes the said three strategies presented. The webinar explains these strategies conceptually, no different than most basic options literature would explain it. (e.g. iron condors and put credit spreads.) +- the last 30min is used to sell you an options strategy course for $1997.00. The webinar only addresses three simple options strategies in a very basic way, adding no additional value over any decent options strategy handbook. The webinar invite (the video above) made no mention of the sales pitch at the end of the webinar. It does seem that the "webinar" served as bait; after wrestling through 90 minutes of mundane it seems reasonable to want to listen through to the end / complete the webinar, only to be subjected to a trading education sales pitch all to familiar in the retail trading space. Disappointed, disgusted.
I'm struggling in this market. Stocks that I have held for months and made profits from are not behaving the way I'm used to so I’m quite indecisive on how to tackle this market, any advice would be grateful.
Thank you for being honest and real. I’m getting back to trading after a long time away from it. I had a professional career trading equities and options. I plan to attend many of your classes to develop my options trading skills. I’m learning from your information already.
@SMB Capital - Seth - there's a better way to close a winning BWB trade, in my opinion. Let's say you do the strategy you explained in the video as a 1-lot, so your profit is $100/lot, and your losers are $200/lot. Instead of simply closing the winning trade when it reaches $100 of profit, do this: buy the debit spread which would convert the BWB into a regular butterfly _when_ that debit spread reaches a cost of 10 cents. So you're spending $10 bucks of your $100 profit to buy this spread, but you save 50% in commissions (since you're just buying/selling 2 contracts instead of 4 with the whole butterfly), _and_ you're left with a regular butterfly that now has a "max-loss" of a $90/lot _profit_ and a "lotto-ticket" max-profit the same as the original BWB minus 10 bucks. So by giving up 10 bucks/lot of the original BWB's normal profit, you get to keep your lotto ticket in case the market sells off by a lot and expires at the BWB's top profit point _and_ you're still guaranteed to make $90/lot in _any_ other scenario, no matter what! Here's a REAL-WORLD EXAMPLE of exactly what I'm describing above in a live-trade that I have on right now: On 12/26/2019, I bought the SPX 3115/3110/3075 PUT butterfly expiring on 1/10/2020 for a -1.00 debit (so really a $1 credit). Afterwards, I put an order out to buy the 3105/3075 PUT debit spread for a 0.10 debit (which is OCO'd to my stop-loss order). The market for this debit spread is currently 0.15, so I hope to get filled sometime tomorrow, as the market is strong, and there's only four days left to go on the butterfly - the theta decay alone should bring the debit spread to 0.10. What I'll be left with is a normal 3115/3110/3105 butterfly with a built-in _guaranteed_ $90/lot profit and a max-profit of $590/lot. I just love looking at the risk-graph of these "locked-profit" spreads, as there are no negative values! And there's still 4 days left to go until expiration! You can do a similar thing with a lot of complex-option trades, but the BWB is probably the best to do them on since it doesn't take away much of your original profit-target. Of course, now that I'm writing what I hope to happen, the option gods are going to strike me down, and the market will crash tomorrow, lol!
@Galileo7of9 - You basically have the idea right. But remember, you buy the $10 debit spread _after_ the butterfly is nearly worthless, so you already have almost a $100 to $110 floating profit on the broken wing butterfly. By spending $10 bucks on the "conversion" debit spread, it's like you're taking $10 out of your floating profit, and spending it in advance. Once the trade executes, you will see on your risk profile graph that you have no negative "max loss" anymore - in TOS, the light cyan line is all above zero at _any_ price, 0 to infinity. Sure, you're spending $10 bucks on something that has _almost_ no chance of happening - 2% in your scenario; but 2% isn't nothing... you could close your entire broken wing butterfly and keep that extra $10 bucks and pay double in commissions, but then you'd have a 0% chance of getting an extra $2890 bucks. You're right, on paper, it seems like a lottery ticket doing it my way, but it _has_ happened to me one time where I spent $20 bucks to close this _exact_ same type of BWB (broken wing butterfly) trade on NFLX (I had two lots), and it expired within 1 cent of my short PUT body strike! I spent $20 bucks, and made an extra $6000 dollars! So there you have it! I would've so kicked myself if I had just closed the whole BWB trade at the ~$240 floating profit I had at the time (on the Thursday before expiration). So, yeah, 2%... :D If I had always closed the entire BWB trade in one swoop (no extra debit spread), I would have to do this same trade 300 times before the extra $20 dollars in savings added up to the $6,000 I made on that one day.
@Galileo7of9 ok, so the problem was you did the -3170/+3165 spread, but it should be the -3155/+3165 PUT debit spread for 0.10 debit. This shows a max loss of +$100. I was the in the SPX 24 JAN +3175/-3170/-3170/+3140 bwb until today, which I originally got for a 1.05 credit (shows as -1.05 debit in TOS) on 1/13. Today, my GTC order for the -3175/+3200 debit spread got executed for 0.10. Now that makes my position the +3140/-3170/-3170/+3200 PUT fly. TOS now shows this position with the cyan line at +$1016 at the base (max loss) and somewhere around +$6500 max profit (my position size was 2 lots). It's showing about $850 more on the "max loss" than it should because it's no longer considering the amount I paid for the 3175 PUT originally (which was $4.28 x 2 lots = about $850). Now is it more clear?
@Galileo7of9 - another way to look at this is: I have the 3200/3170/3140 PUT butterfly as my final position today. What were my net debit/credits used to get here? I'll read you my trade history: on 1/13, got in a 1.05 credit, and on 1/21 (today) got debited 0.10. So what's my net? A credit of 0.95. Now go into TOS and enter an order for buying the 3200/3170/3140 fly for a 0.95 credit. Hit analyze. Now do you see no negative values? Max loss of +$190, right? Of course, nobody would sell you this fly for a 0.95 credit because it guarantees them a loss (and guarantees you a profit), right? Also, no brainer, they wouldn't. So the only way to get a fly like this for a 0.95 credit, is to break up the trade, take that "time risk", and then later do the conversion trade. That "time risk" you took translates to your now guaranteed small profit, or huge profit (if the market crashes before Friday). And that "time risk" is potentially huge, remember - max loss on my original BWB was somewhere around $2300/lot and about $900/lot on your BWB (your lowest strike is much further inward, so you have less risk).
You guys are such an inspiration and an authority on options trading. Glad to see your channel exploding! Here are some questions for upcoming videos: 1) When to do Deep OTM options 2) When to do Deep ITM options? 3) This strategy is for a bull market, can you also give an example of a bear market? Do you use the call side or do you do debit spreads? Lots of questions, I know but it would be nice to know as time decay is crucial in options trading.
Great video. Thank you! Question 1: why the 10 Delta strike...why not, say 15 Delta for the short strike? Qustion 2: Is there a weekly butterfly strategy with a very minimal capital requirement and high profil/loss ratio?
This was great, thanks, I've been looking for "examples of options strategies" for a while now, and I think this has helped. You ever tried - Winoorfa Option Olegroson - (search on google ) ? Ive heard some pretty good things about it and my co-worker got great results with it.
Of course you can make a weekly income lmao look at tsla and appl not to mention the downfall of roku and fedex with the upside/downside of ba hell yea brother im 19 and trading is my income... im also a full time college student, i wish i was into forex also but thats a little more difficult in my opinion
This trade consists of two vertical spreads. A) 10 put debit spreads: Buy 10 $SPX 3045 puts = $-7,700 Sell 10 $SPX 3040 puts = $+7,200 ======= $ -500 Max Loss = $500 @ $SPX >= 3045 Max Gain = $4,500 @ $SPX = 3040 Max Loss = $20,000 - $1,800 = $18,200 @ $SPX
Good presentation but it could be improved greatly by illustrating the broken wing option trade on an actual chart and explain briefly what happens as the price of the underlying instrument goes up or down.
I feel investors should focus on under-the-radar stocks, considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises plummeting stocks that were once revered. I don't know where to go here out of devastation.
Starting early is simply the best way of getting ahead to build wealth , investing remains a priority . I learnt from my last year's experience , I am able to build a suitable life because I invested early ahead this time .
In fact, I had no prior experience or understanding when I began investing in 2018, but by the end of 2019, I had made a profit of almost $750k. All I had been doing was going by what my financial advisor had told me. This demonstrates that all you truly need is a professional to assist you; you don't even need to be a great investor or put in a lot of work.
bravo! I appreciate the implementation of ideas and strategies that result to unmeasurable progress, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
‘Grace Adams Cook’ is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Seth.....you are true inspiration.....i feel like a better trader just listening to your videos.....let me get this straight you made three directional trades down....the mkt went up and you still made money? .for me who knows nothing about options...difficult to comprehend....my question is -as a daytrader are there any simple option strategies that can use to play the open? thank you ...your work is outstanding......
Is it possible to put up a video on how to determine / calculate return on investment selling naked options. (call / put) If possible could you use the SPX ? Thankyou. Looking forward to a response.
@Galileo7of9 I'd make a couple of points. One: if someone's going to trade options, they really need to be informed and imbedded in market news and direction daily. That said, a firm assessment of COVID's market impact should've been an immediate red flag on 21Feb2020 and maybe an indicator to exit leveraged positions, especially with increasing volume heading into a weekend. Traders really need to understand when a shift in market sentiment has occurred. This is something that I don't know can be taught, but experience will get you most of the way there. Two: I don't like holding positions over the weekend for this very reason. It concerns me a bit that the video above suggests Friday entries are made - too many DJfnT wartwitter weekends in the past year to make me ever feel comfortable with long-biased positions. That said, I wish more strike price data was given in the video, so I could extrapolate the loss based on your premise. I guess I could look up the data or create a model but just don't want to. Three: paper trade it starting in late December 2018. The losses here will be minimal in context. Anyone can choose the best or worst case data set, myself included. Not everyone can be consistent. If one can't accept a loss, one shouldn't trade this way. Four: seems like the trade in the video executes over 10 days. That's a little more than a week, so not really within the original premise set forth in the video; however, will freely admit that I don't know if we're talking an average holding time of a week over the period tested.
Great video, I’m still new to options. My question to you is when looking at volume and open interest, are high open interest options the good choices to pick. Thanks 🙏
Overall open interest in the stocks options are more important. You can trade a strike with low open interest if other strikes have decent open interest. The higher liquidity of a stocks options will be reflected in a tighter bid/ask.
I only need a $500 week supplement ...however only been learning this stuff since a few months ago ...I needed a challenge and I can't climb Mt. Everest ..it's too far away!
Hey there, just getting started, dont understand anything you are talking about. Kinda like my chemistry class and learning the periodic table...doesn't make sense at first until one day...it finally sinks! I'm just not there yet.
Probably the same odds of success as repeatedly betting black on a roulette table with a exit point. (E.g. if I lose x dollars or win y dollars I’m out)
The webinar provides good instruction regarding selling puts, iron condors and bull put credit spreads, but nothing that is not taught in other RUclips videos. However, over half of the over two hour course is spent trying to hard sell their 15 session online video course and lifetime coaching costing $1997.
Hopefully people aren’t paying that much money. This is all very basic option strategies. Get a Natenberg from the library and teach yourself. I am not a fan of 1:1 risk reward ratios like in this example. I would look for strategies with a 3.5:1 risk reward or better. But these days options are priced correctly so you get what you pay for.
What will be the expectation of the market trend for this strategy? should it be a bullish or bearish or side way? Can it be used at the call side and how? Thanks for your time.
I'm having trouble figuring out what's the worst case scenario for this trade. Like if the market gaps down overnight, what is your maximum loss, using the same numbers you used in the video? Great vids, BTW - I'm learning a lot going though them.
Even the market go side way, you would have profited upon premium decay toward the expiry. The hardest is to pick a correct short point. When too close, the risk would be too high, when too far way, the profit would be too small.
Would it be a good idea to do this on the call side also like an iron condor so you could make more money on the same capital or am I missing somthing?
Good explanation Thank you Which brokers allow those transactions on the indexes? ($100/point)? My broker want me to have the buying power before I place the trade.
Enjoy your videos. Very simple and informative for amateurs. Thanks for your efforts.. I have just started trading/ investing .. got some good profit. Looking for options trading now. Planning to take your workshop some time soon ☺️.
Hi Seth and SMB capital! I love the video and have been using this trade since Dec 2019(not enough buying power for a 10 x 20 x 10 lot) when I first saw the video. My question is do you ever let the butterfly expire? What I'm experiencing is I can't get filled on my exit or I have to work more towards the natural then the mid price. Thanks for your help!
I've heard that options were too difficult to start out trading with. Futures is the futures for newbies. The difficulty lies in taking a bad trade that costs you ten times what you were going to earn.
depends how you structure your trades, size of positions relative to account size, etc. Options mistakes can be costly, but many people learn best by making mistakes, and then implementing changes to avoid those mistakes in the future
There is a simple solution to this. If you do the tests and the math to figure out what your longest losing streaks look like just put that capital aside and probably a little more. For example if your strategy requires 500$ a trade and your biggest losing streak is three trades put 2k off to the side. You have room to lose 4 trades without eating into any recent profits and do the same for your wins. Call it 100$ a win this case put and additional 400$ off to the side. Sure it takes extra capital and your not making full use of it but the exchange is a very very high probability you have an extra 100$ every week forever.
Strategy works so great this guy is still working. If this actually worked do you think the smart money wouldn't already be doing it? Don't be dumb money folks.
I don't really understand why this strategy would be better with a broken wing butterfly than with a short put spread. You wouldn't need to buy the higher put and it would be enough to sell half the amount (10 instead of 20). Your potential profit to start with could be higher, in your example, instead of 1300$ it'd be 1800$ (as you'd save the 7700$ you pay for the buy) and even though your risk is higher, you'd get out anyway when things go south, you'd just need to get out a little bit higher. But instead of closing the trade at 1150$ profit (or 1000), you can close it when you are at 1400$-1500$ profit. Plus, you'd need to pay less commission as you only make 2 transactions instead of 3.
Just wonderful, I have been researching "how much money do you need for options trading?" for a while now, and I think this has helped. Have you heard people talk about - Senichael Uncommunicative Supremacy - (search on google )? It is a good one of a kind product for discovering how to trade options like a pro without the headache. Ive heard some amazing things about it and my buddy got great results with it.
Here’s another strategy one can do on options expiration days on SPX. Just look for the intraday top or bottom and place a vertical spread. Hold it thru expiry for max profit. You can pay yourself 3 times a week quite easily
In looking to put on this trade I'm seeing the price difference on the put debit side of the trade is more than the difference on the put credit side. I'm not sure if that's just the market right now. Really want to try this but right now looks like it just locks in a loss. Or maybe I misunderstand it... I'll watch it again
Is it relatively manageable for one person to use $100k 0r $ 200k to trade to generate say $2000 or $3000 per week? In other words how easily does this method scale?
Hello Seth This case study is based on the market rally and the index moved away from the strike price. But what if there is a market downturn, then how do you compute the loss? Thks
Is there a benefit to using a broken wing butterfly over a regular credit put spread? Would using put spreads with the same 10 delta, 1000$ target profit, 2000$ stop loss give the same results?
Great video! I'm kinda of newbie in options trading and and based on the tradings I've done so far, I'm thinking of switching to a regular(plain) options or just stick with "Asset or Nothing" put options..Any advice or suggestions will be very much appreciated, thanks!
Well I think since you're a newbie and still finding your way around the whole options trade, you should stick with the asset or nothing trade because it's straight forward and less demanding compared to the regular trade which I believe is more profitable but requires lot of experience and complications for you to find your way around.
I'll have to agree with the sales rep. You should stick with the asset or nothing trade for now because it is far more easier to work with although the regular offers way more profits depending on the underlying assets though.
Me too! you'll need a much more experienced trader to help you out if you're trying out the plain trade, a trader who's been on this for long and knows how to work his/her way around it.. that way, you not only cut your loses and make maximize your profits, you also gain more experience and grounds while at it.
I couldn't agree more with Allen! There are a lot of things you've got to understand when trading options especially as a newbie, and it takes times to master and understand the various patterns so you can't just start trading on your own or you're most likely going to run at a loss, be discouraged and end up quitting which personally I believe is the wrong option.
Really glad to have stumbled on this, very insightful! Please can anyone recommend a good, well proven and experienced trader I can work with? Thanks guys.
Thank you for the information, I'm still a bit fuzzy though. Can someone explain to me what the main differences is between this strategy and a put credit spread?
The main difference is in the max profit . Credit spread max profit n loss is set at the beginning. BWB achieves max profit when the price actually drops to the sold strikes, which means the profit is not defined until the last moment.
This trade consists of 10 put debit spreads and 10 put credit spreads: A) 10 put debit spreads: Buy 10 $SPX 3045 puts = $-7,700 Sell 10 $SPX 3040 puts = $+7,200 ======= $ -500 Max Loss = $500 @ $SPX >= 3045 Max Gain = $4,500 @ $SPX = 3040 Max Loss = $20,000 - $1,800 = $18,200 @ $SPX
In short, no you can’t make $1000 a week. But you can make $52,000 a year which would average out to $1,000 a week. You just have to accept $2,000 losses for consecutive weeks. Stock up on Vienna sausages in the good weeks cuz your gonna need em !
Thanks for the vid. At first I was a bit skeptical thinking it was the usual "make money in any market" straddle pitch. I was pleased to find candid, detailed info though. Was the reason you bought the put that gave $1000 credit simply for the value or are you looking for a delta range for the whole trade?
I'm interested as to why you wouldn't let the short puts run to expiration worthless letting you keep the entirity of the credit received from selling it and simply sell the long puts closer to experation to reclaim some of debit from buying them for a greater profit
If you buy a 3010 and it goes to 3015, you are saying you make the full 5 points. That would have your option cost at 0. Now if you sold a 3010 put and it closed above it, then you would collect 100% premium.
Keep saving money, and stop throwing money away on non-necessities. Save up $5k, then $10k, then $50k, then $100k, and then hopefully hit your first $250k, ...etc... then the amount of contracts you can sell increases. Then you can sell more contracts on a weekly basis with odds in your favor.
The world needs to know about Bitcoin because it`s the most important development earning approximately $12,000 from an investment of $1000 is really something very important to talk about . Thanks to Mr ben on insta @Ben_uptrade and I'm saying good bye to paycheck for good.
Really enjoying the videos... as with anything it’s like déjà Vous .. don’t want to create any unweildy 🐙 octopus let alone a giant vampire squid 🦑 that could take down a 🐋 I really liked the first vid I saw about Eminis and locking in delta and thought right away i will have to look at how I can apply that to stock gains.. truly enjoying your videos so far.. we’ll done ✅ Though creating a Vampire Squid to go whale hunting could be fun ;)
Good video Seth like the other video about the trader who came to you about vertical credit spread weekly puts seems easier. Could you do another video on that subject.
Can you give me your opinion on Tesla? I just subscribed, been seeing your channel pop up on my recommended. I always enjoy the smaller channels as I feel they are more genuine and speak to me! Thanks all!
Seth, thank you again for your contribution to the trading community, very informative. Really liked how you put all the risks on the table, indeed there is no magic in trading. Although, as newbie in options trading i would like to see an approach on the how to backtest strategies. Could you provide with some future videos or tools available in internet? Thank you in advance. Nuno
The graph showing where to place the strike is upside down and opposite of the explanation On the graph it starts at 10 delta and says to place the long 5 above but it is shown 5 below than the next long is placed further above which is going to give you a debit not a credit The explanation makes more sense than the graph so the next long should be well below the short at the 10 delta to give you $1000 credit
Hi Seth, You are really awesome & inspiring. Thanks a lot for doing this. I have question regarding entry point, you mentioned 10 delta put, could you share the logic behind that 10 delta?
Choosing a far away delta should be due to probability of expiring out of the money. The trader will hope that the price stays above PUTS in most weeks but hope for a lottery move if the underlying moves down slowly.
Collect 1k on 25k margin in 14 days, stagger another position 1wk into the first trade, ladder & keep rolling, avg 1% wk return on pie (ROE)/10% return on slice (ROI).. if don't mind cap inefficiency and volatile PnL increment volatility/frequency of change/path dependency distribution to destination point of max credit collected
Couldn't you double this up by doing sort of a iron condor version of this by doing a 10/-20/10 call spread ABOVE the stock price as well? You would just have the same rules, 10 delta, 1 strike below, then go up until you find an option price that gets you just over your $1000 credit objective, but do this for a call. Seems like you could more than double your potential average earnings by having maximum gains of $2,600, and maximum losses of only $700. Whenever you would lose the entire $2000, you would automatically get the $1300 on the otherside, for a maximum loss of $700. The margin requirement still would
5:20 actually starts
Doing gods work
You saved people thousands of hours
I should’ve come straight to comments, I saw this until when I was 4:49
my man
thank you
no sugar coating - no click baits. I love content like this! Keeping it realistic is a big positive as well.
The constant reminder that you need to be prepared to take losses and plan accordingly is why I keep coming back to this channel.
thx Alex! glad to have you back
If you need to be reminded that you need to be prepared to take losses, simply do a few of these trades.
lmao@@herrickinman9303
Yep, some of this can be quite difficult to take in, you really have to pay attention to detail, be good in basic math, and have good multi-tasking skills. And for anyone who is just getting started on their own in stock trading shouldn’t be using this strategy. Just learn how to buy low and sell high on swing trading for a bit. Do your research, have a good spread of stocks, don’t just put your money in just 1 particular stock, have 5 to 8 stocks, put a few of them in low risk that you wouldn’t mind holding on to for long time, and practice on 1 or 2 stocks to research in and play with. Buy in low sell high, get out. Buy in low sell high, rinse repeat. You can make money, it will take a little time to build up a good amount of money, but over time, of sliding funds into your account, and mixture of learning on how to buy low sell high with 2 stocks you can graduate to doing this with 3 different stocks, 4 different stocks, and so on. But, this is what I’m doing for now, this strategy of trading options can be done on the think or swim platform for practice. The main thing I’m getting at is be cautious and thing logical.
Thank you for the tips 👍🏼👍🏼👍🏼
Being new to trading options I would love a step by step tutorial on how to place a broken wing butterfly and other option strategies. It’s difficult to tell where the calls/puts are in your video but I love the instruction. Seth is an excellent trainer and really breaks things down into an easy-to-understand explanation.
If anyone is new to options, then they should NOT be trading butterflies. This is an advanced strategy and not suitable for newbies.
@@desisher5292facts 💯 %
At least this guy is honest and realistic about drawdowns.
even happens to the best traders at SMB
The workshop goes over Credit Spreads and Iron Condors.Its pretty clear and easy to understand. In short if you have a small account, don't waste the 2 hrs. 30 mins is spent hyping up their own legitimacy at the beginning, 30 min at the end offering their 6 -8k video course.
Thank you
Absolutely agree! Staying consistent and managing risk properly has been great for options income strategies!
Just getting into all this trading, investing. This video has been by far the most up front and honest training/teaching I've watched.
Then wait till you try out Mr Fabian, his trading strategies and investments techniques are top notch and you're rest assured of making profitable returns with him. He's a verified and proven trader. By far the very best I've ever worked with. You can réåch him on * fabianconner770 ⓐ gmaiI, com *
Honest and glaringly straight to the point. There is no magic ATM machine out there. And, you will face losses. You will need $62K in capital/margin to make $52K or 81% returns, with losses, based on where the option is headed. This BROKEN WING BUTTERFLY strategy on the SPX index is definitely for intermediate to expert traders. Thank you Seth Freudberg.
Why not do the same strategy at SPY? It would require 10X less capital.
what about a 17 year old trying to start
@@tylerrb1937 Honestly age has nothing to do with it. If you can understand the nuance of the trades and do the math, you should be fine. One thing you must do though is keep wishes and ego out of your decision making process. This is not place for wishful thinking... you must be disciplined, follow the strategy to the letter, understand there will be losing weeks and budget for the weeks you will lose money. Because those weeks will come.
Put this trade on 12/4. Up $800 in 2 days. Thanks Seth for all you guys do for retail traders!
Tony Hamby how much did u invest?
@Galileo7of9 Why do you say this is "meaningless"??
Update?
This guy's presentations seem remarkably free of b.s.
The first 5 minutes are essentially and ad with good graphics?
I always cut the trade if it loses as much as I'm looking to gain. Keeping a 1:1 risk reward ratio on known max gain trades is paramount for me. I like your teaching and presentation style.
It would have to be 1:1 or at least something approximating that ratio, because if you took a loss of $2000, as was stated during the broken butterfly strategy, for approximately 20% of the time, within a year, you effectively make nothing. Am I missing something or does this make since? I'm new to this btw, just trying to understand.
@@caw5v yeah ideally you'd want to get out long before you reach a max loss scenario. As long as you lose less than you make you'll be good
You will still be in profit. Out of 10 trades you lose 2 x $2000 (20 percent) = - $4000.00. You win 8 x $1000 (80 percent) = + $8000.00. The difference is $4000.00.
@@georgio318 The problem is when the market gaps down below bottom strike and you lose $15,000. It's hard to set a limit loss in the market.
@@lrbjr123 can't happen on a spread.
Also closing your winners at a set % keeps em from coming back on you and being losers.
Hello Seth Freudberg!
A retail investor with a small account (under 5K) would rather do a different technique. A "naked" PUT option for example for this week of March 1 thru 5 2021 on WKHS and RKT.
An investment of 14K will bring an awesome return.
Thank you for not telling me that is a very dangerous game (naked options). I've learned it hard way.
Enjoyed the lesson. I’m just learning options now and not ready for this, but maybe in the future.
This was great, thanks, I've been looking for "options trading program" for a while now, and I think this has helped. Have you ever come across - Winoorfa Option Olegroson - (do a search on google ) ? Ive heard some incredible things about it and my work buddy got cool results with it.
Start small and slow.
Butterfly's are more complex. Start with Vertical Spreads, Iron Condors, and an occasional Naked Put/Call on VERY low priced underlying ($20 or less).
Start there and then move onto Strangles, Straddles, Iron Flys, Diagonals.
Finally, Butterflys and other things. Also there are futures as well.
Same. Not ready to try this yet and I have an honor's degree in Economics and Accounting with a minor in applied math. Yet, is the key term here. We will get there.
I have just started a Options class I paid $900 for. I thankyou for explaining with as little as $65,000 i can make $48k +/- a year. At present I make 16 % on $200,000 or $32,000. So your numbers are interesting to me.
I appreciate the honesty about having the possibility of spiraling losses.
I just do call options on good stock. Every now and then put spreads.Options can get addicting be careful.
Some examples of current put spreads?
Pavel Curda I’m putting in a put on WingStop tomorrow.
Any plan to make a million in 5 years
True very addicting
@@willmurrin9344 details?
At 13:20 their is an invite to a webinar to learn 3 options strategies.
In the said "webinar" this is how it goes:
+- the first 30 minutes of the "webinar" is about how great SMB is.
in +- the next 60 minutes the said three strategies presented. The webinar explains these strategies conceptually, no different than most basic options literature would explain it. (e.g. iron condors and put credit spreads.)
+- the last 30min is used to sell you an options strategy course for $1997.00.
The webinar only addresses three simple options strategies in a very basic way, adding no additional value over any decent options strategy handbook.
The webinar invite (the video above) made no mention of the sales pitch at the end of the webinar.
It does seem that the "webinar" served as bait; after wrestling through 90 minutes of mundane it seems reasonable to want to listen through to the end / complete the webinar, only to be subjected to a trading education sales pitch all to familiar in the retail trading space.
Disappointed, disgusted.
This is how they make the money. Some are going to pay.
I'm struggling in this market. Stocks that I have held for months and made profits from are not behaving the way I'm used to so I’m quite indecisive on how to tackle this market, any advice would be grateful.
@PhyllisPierce That sounds great and what signal do you invest with?
@PhyllisPierce That's awesome and please how do I connect with this broker lady?
@PhyllisPierce I'm currently on her webpage now, her reviews are very impressive and I left a message for her. thanks, a lot.
Thank you for being honest and real. I’m getting back to trading after a long time away from it. I had a professional career trading equities and options. I plan to attend many of your classes to develop my options trading skills. I’m learning from your information already.
Great content. If you could zoom in you screen when you display tables that would help people like myself with poor eyesight.
Thanks
thanks for suggestion.
Try zoom under accessibility if using ios, or mag tool if windows 10
Hit the Windows key Then the plus key, but, definition not great, for him to give a closer zoom would improve.
@SMB Capital - Seth - there's a better way to close a winning BWB trade, in my opinion. Let's say you do the strategy you explained in the video as a 1-lot, so your profit is $100/lot, and your losers are $200/lot. Instead of simply closing the winning trade when it reaches $100 of profit, do this: buy the debit spread which would convert the BWB into a regular butterfly _when_ that debit spread reaches a cost of 10 cents. So you're spending $10 bucks of your $100 profit to buy this spread, but you save 50% in commissions (since you're just buying/selling 2 contracts instead of 4 with the whole butterfly), _and_ you're left with a regular butterfly that now has a "max-loss" of a $90/lot _profit_ and a "lotto-ticket" max-profit the same as the original BWB minus 10 bucks. So by giving up 10 bucks/lot of the original BWB's normal profit, you get to keep your lotto ticket in case the market sells off by a lot and expires at the BWB's top profit point _and_ you're still guaranteed to make $90/lot in _any_ other scenario, no matter what!
Here's a REAL-WORLD EXAMPLE of exactly what I'm describing above in a live-trade that I have on right now:
On 12/26/2019, I bought the SPX 3115/3110/3075 PUT butterfly expiring on 1/10/2020 for a -1.00 debit (so really a $1 credit). Afterwards, I put an order out to buy the 3105/3075 PUT debit spread for a 0.10 debit (which is OCO'd to my stop-loss order). The market for this debit spread is currently 0.15, so I hope to get filled sometime tomorrow, as the market is strong, and there's only four days left to go on the butterfly - the theta decay alone should bring the debit spread to 0.10. What I'll be left with is a normal 3115/3110/3105 butterfly with a built-in _guaranteed_ $90/lot profit and a max-profit of $590/lot. I just love looking at the risk-graph of these "locked-profit" spreads, as there are no negative values! And there's still 4 days left to go until expiration! You can do a similar thing with a lot of complex-option trades, but the BWB is probably the best to do them on since it doesn't take away much of your original profit-target.
Of course, now that I'm writing what I hope to happen, the option gods are going to strike me down, and the market will crash tomorrow, lol!
@Galileo7of9 - You basically have the idea right. But remember, you buy the $10 debit spread _after_ the butterfly is nearly worthless, so you already have almost a $100 to $110 floating profit on the broken wing butterfly. By spending $10 bucks on the "conversion" debit spread, it's like you're taking $10 out of your floating profit, and spending it in advance. Once the trade executes, you will see on your risk profile graph that you have no negative "max loss" anymore - in TOS, the light cyan line is all above zero at _any_ price, 0 to infinity. Sure, you're spending $10 bucks on something that has _almost_ no chance of happening - 2% in your scenario; but 2% isn't nothing... you could close your entire broken wing butterfly and keep that extra $10 bucks and pay double in commissions, but then you'd have a 0% chance of getting an extra $2890 bucks. You're right, on paper, it seems like a lottery ticket doing it my way, but it _has_ happened to me one time where I spent $20 bucks to close this _exact_ same type of BWB (broken wing butterfly) trade on NFLX (I had two lots), and it expired within 1 cent of my short PUT body strike! I spent $20 bucks, and made an extra $6000 dollars! So there you have it! I would've so kicked myself if I had just closed the whole BWB trade at the ~$240 floating profit I had at the time (on the Thursday before expiration). So, yeah, 2%... :D If I had always closed the entire BWB trade in one swoop (no extra debit spread), I would have to do this same trade 300 times before the extra $20 dollars in savings added up to the $6,000 I made on that one day.
@Galileo7of9 - yes, something is wrong then. I'll run a sim of your trade in TOS and see what's going on...
@Galileo7of9 ok, so the problem was you did the -3170/+3165 spread, but it should be the -3155/+3165 PUT debit spread for 0.10 debit. This shows a max loss of +$100. I was the in the SPX 24 JAN +3175/-3170/-3170/+3140 bwb until today, which I originally got for a 1.05 credit (shows as -1.05 debit in TOS) on 1/13. Today, my GTC order for the -3175/+3200 debit spread got executed for 0.10. Now that makes my position the +3140/-3170/-3170/+3200 PUT fly. TOS now shows this position with the cyan line at +$1016 at the base (max loss) and somewhere around +$6500 max profit (my position size was 2 lots). It's showing about $850 more on the "max loss" than it should because it's no longer considering the amount I paid for the 3175 PUT originally (which was $4.28 x 2 lots = about $850). Now is it more clear?
@Galileo7of9 - another way to look at this is: I have the 3200/3170/3140 PUT butterfly as my final position today. What were my net debit/credits used to get here? I'll read you my trade history: on 1/13, got in a 1.05 credit, and on 1/21 (today) got debited 0.10. So what's my net? A credit of 0.95. Now go into TOS and enter an order for buying the 3200/3170/3140 fly for a 0.95 credit. Hit analyze. Now do you see no negative values? Max loss of +$190, right? Of course, nobody would sell you this fly for a 0.95 credit because it guarantees them a loss (and guarantees you a profit), right? Also, no brainer, they wouldn't. So the only way to get a fly like this for a 0.95 credit, is to break up the trade, take that "time risk", and then later do the conversion trade. That "time risk" you took translates to your now guaranteed small profit, or huge profit (if the market crashes before Friday). And that "time risk" is potentially huge, remember - max loss on my original BWB was somewhere around $2300/lot and about $900/lot on your BWB (your lowest strike is much further inward, so you have less risk).
@Galileo7of9 - Yes, exactly!!
You guys are such an inspiration and an authority on options trading. Glad to see your channel exploding! Here are some questions for upcoming videos: 1) When to do Deep OTM options 2) When to do Deep ITM options? 3) This strategy is for a bull market, can you also give an example of a bear market? Do you use the call side or do you do debit spreads? Lots of questions, I know but it would be nice to know as time decay is crucial in options trading.
You are really professional Mr. Freudberg!
thx Haim!
Great video. Thank you!
Question 1: why the 10 Delta strike...why not, say 15 Delta for the short strike?
Qustion 2: Is there a weekly butterfly strategy with a very minimal capital requirement and high profil/loss ratio?
"We'll all be billionaires if our Back Tests worked in the future."
Quote from staff of CBOE.
This was great, thanks, I've been looking for "examples of options strategies" for a while now, and I think this has helped. You ever tried - Winoorfa Option Olegroson - (search on google ) ? Ive heard some pretty good things about it and my co-worker got great results with it.
Of course you can make a weekly income lmao look at tsla and appl not to mention the downfall of roku and fedex with the upside/downside of ba hell yea brother im 19 and trading is my income... im also a full time college student, i wish i was into forex also but thats a little more difficult in my opinion
Exactly. They are back testing, not trading. NEVER pay attention to someone who “proves” his strategy with back testing. Don’t walk away - run!
cdaddy20 people who don't have the knack in this field should stay away from this kind of biz. Stick to Rap
@@randallblake1213 pls check meaning of ur name in Indian language....RAND
This trade consists of two vertical spreads.
A) 10 put debit spreads:
Buy 10 $SPX 3045 puts = $-7,700
Sell 10 $SPX 3040 puts = $+7,200
=======
$ -500
Max Loss = $500 @ $SPX >= 3045
Max Gain = $4,500 @ $SPX = 3040
Max Loss = $20,000 - $1,800 = $18,200 @ $SPX
Good presentation but it could be improved greatly by illustrating the broken wing option trade on an actual chart and explain briefly what happens as the price of the underlying instrument goes up or down.
I feel investors should focus on under-the-radar stocks, considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises plummeting stocks that were once revered. I don't know where to go here out of devastation.
Starting early is simply the best way of getting ahead to build wealth , investing remains a priority . I learnt from my last year's experience , I am able to build a suitable life because I invested early ahead this time .
In fact, I had no prior experience or understanding when I began investing in 2018, but by the end of 2019, I had made a profit of almost $750k. All I had been doing was going by what my financial advisor had told me. This demonstrates that all you truly need is a professional to assist you; you don't even need to be a great investor or put in a lot of work.
bravo! I appreciate the implementation of ideas and strategies that result to unmeasurable progress, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
‘Grace Adams Cook’ is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I looked her up, and I have sent her an email. I hope she gets back to me soon. Thank you
It's one of my favourite strategies for income generating. One caveat though - it does require a sizable capital Thx...
Is it easy to implement??
Unlike many new trading sites that offer options education, this channel is the real deal. Seth is a real options trader. Great information.
How much capital is required for this trade?
@@jandolin he tells you in the video click here ➡ 10:44
@@insurancecasino5790 Thank you.
Thank you for this information. I like someone to shoot straight and no bull. I subscribed.
Thx Micheal! Glad to have you as a subscriber
No bull... lol
Who cares if it's $150 / month for a $5,000 account. Fuxk that
A very honest and wise assessment. Thank you.
Seth.....you are true inspiration.....i feel like a better trader just listening to your videos.....let me get this straight you made three directional trades down....the mkt went up and you still made money? .for me who knows nothing about options...difficult to comprehend....my question is -as a daytrader are there any simple option strategies that can use to play the open?
thank you ...your work is outstanding......
Is it possible to put up a video on how to determine / calculate return on investment selling naked options. (call / put) If possible could you use the SPX ? Thankyou. Looking forward to a response.
Selling naked the loss can be infinite
I learned how to do covered calls and loving it
Been paper trading this strategy and damn it profits consistently
@Galileo7of9 I'd make a couple of points. One: if someone's going to trade options, they really need to be informed and imbedded in market news and direction daily. That said, a firm assessment of COVID's market impact should've been an immediate red flag on 21Feb2020 and maybe an indicator to exit leveraged positions, especially with increasing volume heading into a weekend. Traders really need to understand when a shift in market sentiment has occurred. This is something that I don't know can be taught, but experience will get you most of the way there. Two: I don't like holding positions over the weekend for this very reason. It concerns me a bit that the video above suggests Friday entries are made - too many DJfnT wartwitter weekends in the past year to make me ever feel comfortable with long-biased positions. That said, I wish more strike price data was given in the video, so I could extrapolate the loss based on your premise. I guess I could look up the data or create a model but just don't want to. Three: paper trade it starting in late December 2018. The losses here will be minimal in context. Anyone can choose the best or worst case data set, myself included. Not everyone can be consistent. If one can't accept a loss, one shouldn't trade this way. Four: seems like the trade in the video executes over 10 days. That's a little more than a week, so not really within the original premise set forth in the video; however, will freely admit that I don't know if we're talking an average holding time of a week over the period tested.
Great video, I’m still new to options. My question to you is when looking at volume and open interest, are high open interest options the good choices to pick. Thanks 🙏
Or the difference the bid and ask
Overall open interest in the stocks options are more important. You can trade a strike with low open interest if other strikes have decent open interest.
The higher liquidity of a stocks options will be reflected in a tighter bid/ask.
love the lesson will be watching multiple times bless.
I only need a $500 week supplement ...however only been learning this stuff since a few months ago ...I needed a challenge and I can't climb Mt. Everest ..it's too far away!
Hey there, just getting started, dont understand anything you are talking about. Kinda like my chemistry class and learning the periodic table...doesn't make sense at first until one day...it finally sinks! I'm just not there yet.
Just know, unlike chemistry, you can make direct profits from these lessons. Also unlike chemistry you can incur massive loss. In risk we trust.
Probably the same odds of success as repeatedly betting black on a roulette table with a exit point. (E.g. if I lose x dollars or win y dollars I’m out)
The webinar provides good instruction regarding selling puts, iron condors and bull put credit spreads, but nothing that is not taught in other RUclips videos. However, over half of the over two hour course is spent trying to hard sell their 15 session online video course and lifetime coaching costing $1997.
They may encourage purchasing their products but their advice is solid and relatively bias - free
Agreed. The instruction was very good.
Hopefully people aren’t paying that much money. This is all very basic option strategies. Get a Natenberg from the library and teach yourself. I am not a fan of 1:1 risk reward ratios like in this example. I would look for strategies with a 3.5:1 risk reward or better. But these days options are priced correctly so you get what you pay for.
What will be the expectation of the market trend for this strategy? should it be a bullish or bearish or side way? Can it be used at the call side and how? Thanks for your time.
I'm having trouble figuring out what's the worst case scenario for this trade. Like if the market gaps down overnight, what is your maximum loss, using the same numbers you used in the video? Great vids, BTW - I'm learning a lot going though them.
Even the market go side way, you would have profited upon premium decay toward the expiry. The hardest is to pick a correct short point. When too close, the risk would be too high, when too far way, the profit would be too small.
Would it be a good idea to do this on the call side also like an iron condor so you could make more money on the same capital or am I missing somthing?
Why example of Put Options only? Does it work for Call options? How to choose Call or Put?
Good explanation
Thank you
Which brokers allow those transactions on the indexes? ($100/point)?
My broker want me to have the buying power before I place the trade.
Enjoy your videos. Very simple and informative for amateurs. Thanks for your efforts.. I have just started trading/ investing .. got some good profit. Looking for options trading now. Planning to take your workshop some time soon ☺️.
Start at 11:57, watch it to 13:17 10 to 15 times, then start at the beginning.
Key is capital required however, you can start options trading with minimal capital also and move towards advanced strategies.
Hi Seth and SMB capital! I love the video and have been using this trade since Dec 2019(not enough buying power for a 10 x 20 x 10 lot) when I first saw the video. My question is do you ever let the butterfly expire? What I'm experiencing is I can't get filled on my exit or I have to work more towards the natural then the mid price. Thanks for your help!
I've heard that options were too difficult to start out trading with. Futures is the futures for newbies. The difficulty lies in taking a bad trade that costs you ten times what you were going to earn.
depends how you structure your trades, size of positions relative to account size, etc. Options mistakes can be costly, but many people learn best by making mistakes, and then implementing changes to avoid those mistakes in the future
Do you know how much future's, cost
Great work. With Opvue now closed, which software do you use to manage your positions.? Thanks. Mick.
There is a simple solution to this. If you do the tests and the math to figure out what your longest losing streaks look like just put that capital aside and probably a little more. For example if your strategy requires 500$ a trade and your biggest losing streak is three trades put 2k off to the side. You have room to lose 4 trades without eating into any recent profits and do the same for your wins. Call it 100$ a win this case put and additional 400$ off to the side. Sure it takes extra capital and your not making full use of it but the exchange is a very very high probability you have an extra 100$ every week forever.
Strategy works so great this guy is still working. If this actually worked do you think the smart money wouldn't already be doing it? Don't be dumb money folks.
I don't really understand why this strategy would be better with a broken wing butterfly than with a short put spread. You wouldn't need to buy the higher put and it would be enough to sell half the amount (10 instead of 20). Your potential profit to start with could be higher, in your example, instead of 1300$ it'd be 1800$ (as you'd save the 7700$ you pay for the buy) and even though your risk is higher, you'd get out anyway when things go south, you'd just need to get out a little bit higher.
But instead of closing the trade at 1150$ profit (or 1000), you can close it when you are at 1400$-1500$ profit.
Plus, you'd need to pay less commission as you only make 2 transactions instead of 3.
A stradle every day is more proffitable imo
Can you elaborate on that? Thx.
Just wonderful, I have been researching "how much money do you need for options trading?" for a while now, and I think this has helped. Have you heard people talk about - Senichael Uncommunicative Supremacy - (search on google )?
It is a good one of a kind product for discovering how to trade options like a pro without the headache. Ive heard some amazing things about it and my buddy got great results with it.
Here’s another strategy one can do on options expiration days on SPX. Just look for the intraday top or bottom and place a vertical spread. Hold it thru expiry for max profit. You can pay yourself 3 times a week quite easily
Y
Incredible video.
thx!
Thank you for the great and informative video. Is the $1000 profit after any trading fees?
In looking to put on this trade I'm seeing the price difference on the put debit side of the trade is more than the difference on the put credit side. I'm not sure if that's just the market right now. Really want to try this but right now looks like it just locks in a loss. Or maybe I misunderstand it... I'll watch it again
Fantastic overview! Thank you.
Is it relatively manageable for one person to use $100k 0r $ 200k to trade to generate say $2000 or $3000 per week? In other words how easily does this method scale?
How about setting a similar BWB on the calls as well?
Hello Seth
This case study is based on the market rally and the index moved away from the strike price. But what if there is a market downturn, then how do you compute the loss? Thks
Is there a benefit to using a broken wing butterfly over a regular credit put spread? Would using put spreads with the same 10 delta, 1000$ target profit, 2000$ stop loss give the same results?
Love the backtesting results you give. Thanks
Great video! I'm kinda of newbie in options trading and and based on the tradings I've done so far, I'm thinking of switching to a regular(plain) options or just stick with "Asset or Nothing" put options..Any advice or suggestions will be very much appreciated, thanks!
Well I think since you're a newbie and still finding your way around the whole options trade, you should stick with the asset or nothing trade because it's straight forward and less demanding compared to the regular trade which I believe is more profitable but requires lot of experience and complications for you to find your way around.
I'll have to agree with the sales rep. You should stick with the asset or nothing trade for now because it is far more easier to work with although the regular offers way more profits depending on the underlying assets though.
Me too! you'll need a much more experienced trader to help you out if you're trying out the plain trade, a trader who's been on this for long and knows how to work his/her way around it.. that way, you not only cut your loses and make maximize your profits, you also gain more experience and grounds while at it.
I couldn't agree more with Allen! There are a lot of things you've got to understand when trading options especially as a newbie, and it takes times to master and understand the various patterns so you can't just start trading on your own or you're most likely going to run at a loss, be discouraged and end up quitting which personally I believe is the wrong option.
Really glad to have stumbled on this, very insightful! Please can anyone recommend a good, well proven and experienced trader I can work with? Thanks guys.
Where do I apply? I just got my options certifications!
What is the advantage to doing a broken wing butterfly over a simple put spread
Welp I'm not ready for this video yet lol
Go watch, how to trade options in robinhood, from channel In the money, he explained it pretty well.
Good. Better one should also learn how to adjust the positions for better results.. 👍
Appreciate great video on weekly stratagy. Thanks
Thank you for the information, I'm still a bit fuzzy though. Can someone explain to me what the main differences is between this strategy and a put credit spread?
The main difference is in the max profit . Credit spread max profit n loss is set at the beginning. BWB achieves max profit when the price actually drops to the sold strikes, which means the profit is not defined until the last moment.
A butterfly is basically a put spread - spread. In this example, you are buying the 3040/3045 put spread and selling the 3020/3045 put spread.
This trade consists of 10 put debit spreads and 10 put credit spreads:
A) 10 put debit spreads:
Buy 10 $SPX 3045 puts = $-7,700
Sell 10 $SPX 3040 puts = $+7,200
=======
$ -500
Max Loss = $500 @ $SPX >= 3045
Max Gain = $4,500 @ $SPX = 3040
Max Loss = $20,000 - $1,800 = $18,200 @ $SPX
Thanks for the great content!
Hi Seth! What sort of market conditions is this strategy best suited for? Any minimum IV requirement?
Are these workshops still running in september 2020?
In short, no you can’t make $1000 a week. But you can make $52,000 a year which would average out to $1,000 a week. You just have to accept $2,000 losses for consecutive weeks. Stock up on Vienna sausages in the good weeks cuz your gonna need em !
So much better than that ragingbull.com crap.
I tried this strategy on 12/4. It definitely wasn't "easy" :-)
Andy Zhao you got caught with the volatility. This works 80% of the time. You will get losses still
Can we do covered call options on index fund every month, irrespective of index price and just focus on getting premium on selling call option ?
Yes
Thanks for the vid. At first I was a bit skeptical thinking it was the usual "make money in any market" straddle pitch. I was pleased to find candid, detailed info though. Was the reason you bought the put that gave $1000 credit simply for the value or are you looking for a delta range for the whole trade?
I'm interested as to why you wouldn't let the short puts run to expiration worthless letting you keep the entirity of the credit received from selling it and simply sell the long puts closer to experation to reclaim some of debit from buying them for a greater profit
risk management
If you buy a 3010 and it goes to 3015, you are saying you make the full 5 points. That would have your option cost at 0. Now if you sold a 3010 put and it closed above it, then you would collect 100% premium.
Awesome educational video. Greatly appreciate what you provide. Thank you and look forward to more of your videos.
Keep saving money, and stop throwing money away on non-necessities. Save up $5k, then $10k, then $50k, then $100k, and then hopefully hit your first $250k, ...etc... then the amount of contracts you can sell increases. Then you can sell more contracts on a weekly basis with odds in your favor.
I don’t want a $1000 per week strategy, but I’m thinking about whether a $100 per week strategy is feasible
The world needs to know about Bitcoin because it`s the most important development earning approximately $12,000 from an investment of $1000 is really something very important to talk about . Thanks to Mr ben on insta @Ben_uptrade and I'm saying good bye to paycheck for good.
Really enjoying the videos... as with anything it’s like déjà Vous .. don’t want to create any unweildy 🐙 octopus let alone a giant vampire squid 🦑 that could take down a 🐋
I really liked the first vid I saw about Eminis and locking in delta and thought right away i will have to look at how I can apply that to stock gains..
truly enjoying your videos so far.. we’ll done ✅
Though creating a Vampire Squid to go whale hunting could be fun ;)
Are these strategies only apply to the spx index or can you use this in any stock?
Any stock. You may have early exercise and special dividends issues with single stocks though.
Good video Seth like the other video about the trader who came to you about vertical credit spread weekly puts seems easier. Could you do another video on that subject.
Can you give me your opinion on Tesla? I just subscribed, been seeing your channel pop up on my recommended. I always enjoy the smaller channels as I feel they are more genuine and speak to me! Thanks all!
No one is going to give investment advice on YT. At least no advice I'd follow 😏
Seth, thank you again for your contribution to the trading community, very informative. Really liked how you put all the risks on the table, indeed there is no magic in trading. Although, as newbie in options trading i would like to see an approach on the how to backtest strategies. Could you provide with some future videos or tools available in internet? Thank you in advance.
Nuno
The graph showing where to place the strike is upside down and opposite of the explanation
On the graph it starts at 10 delta and says to place the long 5 above but it is shown 5 below than the next long is placed further above which is going to give you a debit not a credit
The explanation makes more sense than the graph so the next long should be well below the short at the 10 delta to give you $1000 credit
Never mind I see that the option chain is upside down so it makes sense that way
Hi Seth, You are really awesome & inspiring. Thanks a lot for doing this. I have question regarding entry point, you mentioned 10 delta put, could you share the logic behind that 10 delta?
Choosing a far away delta should be due to probability of expiring out of the money. The trader will hope that the price stays above PUTS in most weeks but hope for a lottery move if the underlying moves down slowly.
Do you recommend to do stop losses for intraday weekly option trading?
this is all good but what is the roi% .. I'm guessing its below 2%, that's pretty low for the risk incurred here
Collect 1k on 25k margin in 14 days, stagger another position 1wk into the first trade, ladder & keep rolling, avg 1% wk return on pie (ROE)/10% return on slice (ROI).. if don't mind cap inefficiency and volatile PnL increment volatility/frequency of change/path dependency distribution to destination point of max credit collected
Do you have to be approved for naked option sells?
Couldn't you double this up by doing sort of a iron condor version of this by doing a 10/-20/10 call spread ABOVE the stock price as well? You would just have the same rules, 10 delta, 1 strike below, then go up until you find an option price that gets you just over your $1000 credit objective, but do this for a call. Seems like you could more than double your potential average earnings by having maximum gains of $2,600, and maximum losses of only $700. Whenever you would lose the entire $2000, you would automatically get the $1300 on the otherside, for a maximum loss of $700. The margin requirement still would
Great explanation! Thanks