I am asked quite often for my rules for the butterfly trade. I am sorry but on this public forum I don't hand them out. They are ready available for my fellow Sheridan student.
The reason is three fold;
first the obvious one; it took me time to figure them out, and although there is nothing proprietary about them, I will not publish them here. Keep reading the blog and over time we will hit all aspects of the rules.
Secondly; for me the question is similar to learning you how to drive a car via an internet course.I can teach you the difference between the gas pedal and the break, but how to parallel park becomes difficult without actually being there.
The third reason has to do with personal style. My rules fit my personality and account size. I have fellow, very capable, Sheridan Traders who can't stand my butterfly and swear by their enourmous size Iron Condors. Others do the butterfly as an Iron butterfly. A fellow trader down south plays with different strike widths. All of these traders are profitable for a long time. You will never become free from others if you don't develop your own style. Take a professional mentor, give yourself a year to trade really small (1-5 lots). Study as many traders as you can, not to copy them, but to get in their mind to find out how they think. I guarantee you after a year you will be able to hold your own, if you meet the last condition. You need to LOVE it, just having the wish to make money is not enough.
I enjoy writing (it is a good practice since English is not my first language) about options and the comments give me input for future posts, so please keep coming!
Hi,
I notice your delta's are now at around -117, is that near an adjustement trigger for you?
Peter.
Posted by: Peter | July 22, 2008 at 12:08 AM