Easy cruising for the butterfly up 15% in a week - ain't to bad, right. Especially since you don't need any chart reading skills - you don't have to be right to make this trade work.
Before I close off with the butterfly graph - I want to show you an pairs experimental trade I have entered - a tip of the cap towards Trader E. founder of NYOT.
I had heard of pairs trades before - but was never really appreciative. E is a smart trader and he showed some enthusiasm for pairs trading - that motivated me to delve in again.
I am currently working with the FDX/UPS pair. Before earnings I sold FDX and bought UPS - yesterday when FDX bottomed out - I turned around and currently I am long FDX and short UPS. It couldn't work out any nicer. I am looking at just under 15% profit in a couple of days - for hardly any real market risk. Real market risk here loosely defined as tanking of the broad market. One can expect UPS and FDX to make a similar leg down if things hit the fan. I tried to add the pairs trade chart to this blog but the TOS Flex chart doesn't have a 'Take Picture' option - Start with a hourly line chart and use as symbol FDX-UPS that will show you the move I was able to pick up. Moving down is sell FDX and buy UPS, moving up is buy FDX and sell UPS.
BTW BRK/B has options (since today) - check below for a possible calendar (tongue in cheek)
Below you find my daily butterfly chart.
You should download Jing screen capture tool for pulling off photos when you need to. It is very useful and you can annotate, etc.
Posted by: Brad | June 18, 2009 at 09:41 PM
Ernst - as usual, nice going on the butterfly. You are the master... Keep up the good work.
bill
Posted by: bill | June 21, 2009 at 04:37 PM