How a Butterfly Makes You Money – (Options Strategy Basics)



Today I’ll show you how to make money with options butterfly spreads, which is one of the best options trading strategies. We’ll talk about how the butterfly …

14 thoughts on “How a Butterfly Makes You Money – (Options Strategy Basics)”

  1. Hi Sasha, do you offer any one on one teaching lessons or some kind of mentorships? would be very interested in that. Thank you

  2. So, I've got a few questions:

    Option example on 7/18/21:

    Stock: ISRG: Current Price: $949.56

    Options Expiration Date: Aug 6,2021 (3 Weeks)

    (1) Buy-Call $945.00 – $29.90 [-$2,990.00]

    (3) Sell-Call $942.50 – $32.30 [+$9,690.00]

    (2) Buy-Call $940.00 – $33.55 [-$6,710.00]

    Total: [-$10.00]

    At Expiration if priced at $940.00 its worth: $490.00/4900%

    Anywhere above $945 its worth: $240.00/2400%

    and is in the money down till $40.33 worth: $56.00/560%

    In other words, as long as you have confidence that the stock will go up its a winner, and the potential is substantial for 3 weeks (Not sure how many of you get a 3 week investment worth 2400%!). Going down from current price $4.00 for max 4900% value or up any amount more for 2400%!. But you cant get these to fill together! But separately (Legging it) you can!

    Now, why theoretically its possible I haven't legged and option spread yet…

    What do you need to know/do differently (if anything)?

    I mean I am just buying separately, I'd still want them to expire or for me to sell them out an the EOD of expiration to get max value, right?

    Why don't these fill together?

  3. Qns:
    Do I need to own stocks to sell and cash to buy stocks should my sell call or sell put are exercised in Iron Fly trading?

    From the TOS Order Confirmation – Max Loss, does the amount indicated in the max loss cover the loss for sell call/sell put exercised before expiration?

  4. The problem is – If you’re going to discuss a butterfly, why mention strangles and condors etc.. ??‍♂️

  5. Hi sasha … Thanks for the great video … can u share your thoughts on following … how much should be the duration for the directional butterfly spread .. is there any optimum criteria for it .. Thank

  6. Question, you say you want to sell at the money. But my understanding is that if you sell for credit wouldn't you want price to go away from the strike that your selling? and if so why in the case of a butterfly do we want price to stay in that range that your selling? doesn't price staying in the at the money range put your short options at risk? Do I have this all backwards because I feel like I do. Any help would be greatly appreciated.

  7. I have been selling Calls as the Body Leg of my ButterFlies. But you are selling Puts? What am I possibly doing wrong here?

  8. setting some up on webull, i dont understand why ity says debt $1 and max loss $1 but Max profit $99. so im putting up a dollar to potentially make 98 ?

  9. Love your explanations. I did a butterfly and I didn’t set my exp far out enough, I struggled closing out because my order wasn’t getting filled. I’ve noticed with butterflies and iron condors you have to move fast closing out on profits and pray it gets filled

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