Tuesday, May 5, 2009

Butterfly


The risk profile above is what I would start with. Notice that the current price is 10 points from my break even level.  The reason for this is that this particular butterfly has more of a bullish bias.  To keep with the theme of the falling $VIX and strong SP's.  The adjustment point on this trade would be 880.
The risk profile above is the adjusted trade. Adjusting it would move your lower break even down to about 810 and your higher break even would be 970. This adjustment would be made if you were wrong in your bias. 
If this market continues to show strength then the first trade would be a winner. 

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