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Just for clarification, this trade example was set up 2.1 days away from expiration. On Apr 14 2022, KO closed at 65.02 which would put the trade at a loss of about $60 with about $4 in fees if he held all the way to expiration. The lower leg of the butterfly spread would have been executed with a built in $3 loss and an additional $10-20 charge for execution fee. Standard options fees may vary. In terms of risk on this example trade, based on the time, IV and distance from the strike, this trade had a Very low probability of being profitable without a very large swing in either direction before expiration. Most option setups for this pattern that are further out to give the trade more time to come to fruition will have a much greater loss at risk in the valley, because you are buying a lot of that premium further out to make that trade happen.

@paulw2074

7 ай бұрын

And further clarification he literally just picked a random example didn't say this was a winning play. KO doesn't move much which is why the spread was so cheap.

@freshj6358

4 ай бұрын

You seemed to know your stuff are you down to teach me ? @shorlanTanzo

@C00ltronix

2 ай бұрын

I believe this strategy works only with low IV. Means there is no expected stock move. This said, for KO a move from 65.00 to 65.02 is already not too bad ;-)

@scottamolinari

24 күн бұрын

@@C00ltronix This strategy needs high IV or rather should be done with a stock expected to make a decent move. He said that at the beginning of the video. For instance, I'm writing this on the Sunday after the Crowdstrike failure, where their software screwed up Microsoft updates and took down a lot of important infrastructure for hours. This options trade would be good on CRWD on the next Monday.

Gems man 💎, thank you! where is the video on how to close out positions?

I love your content, HOWEVER, Please let us know how many days to expiration(not just the date) you are implementing on these strategies. THANK YOU SIR!

This is basically a credit spread that pays for a debit spread. The down side is that it's 4 legged, that might make opening and closing it an issue. I'd prefer to just do a credit and a debit spread separately.

@mav2553

6 ай бұрын

Actually its just two debit spreads with different higher legs. And he sold one for only $1. If the stock goes down he's fukt. That "calculator" is wrong. This video is SOOOOOO misleading

@zhcuvz8264

3 ай бұрын

@@mav2553 how ?

I am not trying to be pessimistic, but stocks go up and down all the time, that's why i have never had interest with whatever that has to do with long term, so I would be keen in knowing how to make as much profit as the super investors that generates up-to $20K in few months no matter the market condition

@locationhautejoux

2 жыл бұрын

then buy REITs or something that can give you an income that appreciates or do some research

@Gary-qy4mq

2 жыл бұрын

Look into passive index fund investing and learn some more. Buy Companies stock which you think has huge potential to grow.

@timeka74

2 жыл бұрын

the one effective *technique* I use is having a *financial* coach for guidance who is in the *field* . it might sound basic or generic, but getting in touch with a financial adviser will help you know the right stock to buy. I was able to outperform the market during the pandemic and raise a profit of roughly $280k. invest wisely either for short-term or long-term

@annt.4940

2 жыл бұрын

@@timeka74 Hello Please how do I consult with her for guidance?

@jenicebrain1141

2 жыл бұрын

buy good companies stock that you think has huge potential to grow

Question so you said we have to pay a collateral of 400 something i think it was. And the max loss is $73. So basically they will send you the rest back if the market closes on the $65 option ?

I'll give you two thumbs up.

Can I trade Flys in Webull with a $1,500 dls account?

This would be a great earnings strategy

Thank you for sharing. I have never bought options before. I watched this video and a similar one you did on Appl stock. Options has always confused me, and that's why I wouldn't buy it But you simplified this to make it easy to understand. Thank you!! I know now that I don't need a huge some of money or risk losing a lot by buying and selling options. Again, Thank you.

Thanks for the video. When I try to practice (paper trade) this strategy on the SPX, I don't get a max profit > max loss. In fact, the max loss is always greater than the max profit. You use KO in your example. Is there something specific about KO that allows this trade set-up to accomplish max profit > max loss?

@icemaster6118

2 жыл бұрын

Coca-cola is a considerably stable stock, so betting on it moving is, well, risky.

@MultiplePassiveStreamsOfIncome

2 жыл бұрын

@@icemaster6118 Good to know but still wondering how to find options where the max profit is more than the max loss. I guess that's why Coca Cola was used in this video but still wondering how to scan and locate such options. Thanks

@icemaster6118

2 жыл бұрын

@@MultiplePassiveStreamsOfIncome idk of a scanner, but options (or any other instrument) have a profit bigger than max loss if you're taking a bigger risk. If you have a 90% chance of success no one will pay much to buy an option from you, and vice verca if you're the one buying.

@mav2553

2 жыл бұрын

@@MultiplePassiveStreamsOfIncome simply buying a call will give you unlimited gains and limit loss to price of option. Thats the short answer.

@jose5465

2 жыл бұрын

I just had the same thought you are having. The reason why you are not getting higher returns than max loss is because the implied volatility in the stocks you are looking at is too high. The reason this worked on coca cola is because it’s implied volatility is low and therefore it making a big move is very unlikely so the chances of getting max profit is rare.

Has anyone been able to open a trade like this? Last time I tried for something like this 2 weeks out it sat pending until expired

What's the exact link (from all of them) where you show how to close positions?

Why don't see the option alerts on the discord until after they've been esecuted?

I realy enjoy watching your videos on options, Never tried any options. I would like to start at some point in the future.

Geirmo, can the two buy call options be below the strike price? or it does not matter as long as its between the two?

In Robinhood, it is not letting me execute multiple orders at the same time. After I select one price, the other prices are grayed out. It is says that I have to make separate orders which doesn't correlate to this strategy.

@ericloney523

2 жыл бұрын

You might need to upgrade your options level....

Apart from the obvious difference of the strategy of one being a call and the other a put what is the difference between a short call butterfly spread and a short put butterfly spread? Many thanks

Thanks so much for this video! Just the info I was looking for. And explained in a simple way that I can understand 😅

how much collateral do you need since your max loss is only $73..

The IVx movement expected for April 14Th is +/- 0.56, they are no way how KO will move more than 5 USD in 2 days.

@CLUHVEL

2 жыл бұрын

It’s an example

These videos are great but what are the chances of getting a video setup with a ticker symbol we can actually apply to these setups instead of just a hypothetical. Something we can actually construct and follow its' progression. Otherwise I still have no idea how to select a viable ticker symbol that I can possibly benefit from. Just a "what-if"...

I love this, but since I have 3 trading days in robinhood and in this example there are 4 options here. will that count as 4 trades if I close this position. or does it count at 1 trade???

I really like and enjoy each one of your videos. Question -- how come when I try to copy the same on Robinhood for fun (small loos ones) robinhood keeps my order as pending and never excites it

@sigmazeta8

2 жыл бұрын

Not enough volume. You’ll have to lower the amount of credit you get in order for it to be executed faster.

@BossmansPizzaSanJose

2 жыл бұрын

@@sigmazeta8 thanks but how Exactly do you do that

@sigmazeta8

2 жыл бұрын

@@BossmansPizzaSanJose in Robinhood when you place your order, you should be able to adjust the amount of credit you receive. Just click on the number and lower it a little. If it’s not working just keep trying lower numbers until the order fills. On your order, there is a replace button.

@BossmansPizzaSanJose

2 жыл бұрын

@@sigmazeta8 thank you

how far out was the KO trade placed. ex div date was march 14, but what is the date you are placing the trade on?

The loss range is narrower. However, the real risk is that you can be assigned. Remember you are selling a call that is relatively deep in the money

@akalksander9184

Жыл бұрын

That's why he avoided the dividend date.

@tdiler12

9 ай бұрын

@@akalksander9184Thats the point thats important but you can still get early assignment but is relatively low chance without ex div. Its a risk but then this is options everything is risk.

Do you want to make this trade on a stock that moves a lot like TSLA, or TWTR?

Thank you

Hi , this is great video . Just one qq. How do I identify which stocks fall into this category?

Can you play this strategy when a company has earnings release?

Cool strategy!

how do i calculate the Break Evens, please?

So now let’s say you did a Christmas tree type trade and now want to close it. RH will then ask if you’re wanting to do a credit or debit. Which one is the correct one to choose when you initially paid to enter the trade?

Can we do this with SPX ?

Can you talk about exiting this spread?

Do these crazy plays really work?

@exqueue3813

2 жыл бұрын

No, because coca cola is an incredibly stable stock. Most of the time the price will stay about the same and you'll lose money. To use this you'd have to choose a higher IV stock and the #s will be worse. Maybe you could target stocks right before earnings when they could swing wildly, but it's all a gamble.

@doright8355

2 жыл бұрын

@@exqueue3813 he used KO for example.

@exqueue3813

2 жыл бұрын

@@doright8355 yes I know. But for another stock the premiums will be different and it won't look nearly so attractive. The break evens will be much wider and the potential profit much smaller. He chose KO because it looked good on paper. In reality the algorithms setting the prices are much smarter than all of us. There's no way to "game" the system. Without insider knowledge you just have to grind.

@TheYarcob

2 жыл бұрын

Yes and no. You need to do your own research on which stock to use the strategy for. This one would be good for something that is volitile. Also, KO is sorta bullish, so I do not know what the other commentor is talking about. For instance, if it remains somewhat bullish, then you will make money. It is basically an inverted butterfly, so, yes, it will definitely work with the right stock, but DYOR!!!

@hamusyaigh3317

2 жыл бұрын

At 1:35 the commentator says it could make money due to a unforeseen event causing an unexpected move. Trying to find that will be hard work and very unlikely. The example in this video is never going to happen without such a huge event as the stock will never mover enough within the two days to expiry. It's a pity the commentator cannot emphasize this as it could come over as misleading.

Hi Guillermo, you're such a great mentor. My partner has a hard time selling his Call Butterfly Option in Charles Schwab Streetsmart Edge expiring in 12 more days. It doesn't get filled, no matter what positive Limit Credit he puts in, even on numbers lower than the current BID. Can you do a video tutorial on Selling to Close a Call Butterfly Spread? Thanks!

@darknessfierce4209

Жыл бұрын

Call the brokerage

Can we use this strategy for earnings?

someone poorly explained it to me long ago so i ignored it, now i see it is the best idea i've seen on the internet so far

This is a nice strategy, Im trying to set a trade for NFLX ER tomorrow and its a max loss of $2,040 to a max profit of $460 (which is the credit). Now, If the stock goes up, am I not going to be assigned 200 short shares of the $360 and the $310 ?. Im doing $360/335/310 credit BF.

Can someone explain to me how these strategies that create a loss cap actually work? What I mean is: how do these spreads suddenly protect me from having to sell 100 stocks of something to someone else just because I have 2 buys on either side of the sell strike (think basic butterfly). I've tried looking it up and can't seem to find anything. I'm just curious because I haven't started my option trading journey and I really want to only do the stuff that has low risk and capped reward (enough capped reward still can be awesome after all). I know RH shows that there is a cap on loss, but what stops a person from exercising the 100/200 stock call that I sell? How do these spreads protect you from having to do that?

@Eternal82Soul

2 жыл бұрын

Spreads don't protect you from getting assigned. But they limit your risk. Let's take a call spread for example. Suppose you only sell a call on KO with a strike price of $65 and you don't have any shares (a naked call). As long as the stock price stays below $65, your call will expire worthless (upcoming dividends still might get you assigned at a lower stock price, though). But let's suppose KO all of a sudden spikes in price and ends up at $75. If you don't have the shares and get assigned, you would have to buy 100 shares of KO for $75 and sell them for $65, resulting in a loss of $1,000. But if in addition to that $65 call that you sold you also bought a $70 call, you can be assured that you can buy those 100 shares for $70. You would only lose $500. Even if the price spiked even further to $100, you would never lose more than $500, since you can buy at $70 thanks to that call option you bought.

Hey! Luv ur videos. How can i make this work for other stocks?

Do I need Options level 3 for this? I’m at level 2. I want to see the graph that shows all my options and I can only buy/ sell one call at a time each screen.

@markjauregui8138

2 жыл бұрын

I am in the same situation, only level 2 options.

@mav2553

2 жыл бұрын

@@markjauregui8138 there are videos on KZread that will guide you to get level 3.

@nnenne4

2 жыл бұрын

Yes, you need level 3 to trade spreads because of margin requirements

How do you close out this option if I'm selling before expiration date?

Cherry-picked example is cherry-picked to look attractive. Seems to be a habit of this channel. Try running the analysis on some stocks with high enough IV that they are actually likely to go outside the range and the numbers will be a lot less compelling.

@maybemochi9445

2 жыл бұрын

I think it’s just an example to show off that the strat I was also off put at first when I couldn’t make some of the plays that he had shown but the strat it self is still valid you can still profit quite heavily when applied to the right stock

@brianciofani4698

Жыл бұрын

Excellent comment. KO doesn't move, try it with DASH or COIN Mr. Guierlmo.

Thanks, great video, G, but, if this looks so safe and easy, how come it needs a higher option level and fidelity doesn't want to qualify me for one - and why would this tactic need a margin account to implement, and what is the needed collateral if any? Much appreciated.

@akalksander9184

Жыл бұрын

Fidelity is not an options friendly brokerage. You need a margin account to trade spreads and you need level III options trading approval. Fidelity only allows level II on IRA accounts. You need a margin account so that you can use the credit from the option that you sell to buy the long option without having to wait for the trade to settle which takes two days.

How do you manage these trades in lieu of taking a max loss?

Hey! What if I did the strategy mixed with an iron corridor?

Thank you so very much for this video. You have no idea how much you have helped me. I am now going to make millions of dollars and eventually become a billionaire. You changed my life. Thank you again.

Ah-mazing! Love it!! Thank you!

if those is the choices then creediii is the easy choice. knock at the cabin was absolute garbage.

But how much we will be paying to place this order ????

Why I can not get the credit like your said?

How come when I set up options like this I'm getting a huge max loss and tiny max profit??

@diverdown81

Жыл бұрын

Look at the IV. High IV will raise the price of the call. When the price is higher and IV drops off you can lose money on the IV crush

Is the net credit separate from the max profit or is the max profit the net credit?

@devanhcrow

Жыл бұрын

Max profit would be the net credit

Trying this and option Strat is giving me a max loss of a lot more than what I'm seeing here!

This would be played best on earnings wouldn’t it

Anyone subscribed and using the discord trade suggestions? Any feedback on whether it’s working for you?

what can be had for selling a 0.01 call, you get 1 cent, where did I go wrong? who is following this ????

Can you stop this nonsense. a 100$ stock doesn't move like this in 2-3 days. This is theory of options and theory always looks good. Giving half baked info is not ehtical. Did you talk about how to recover losses if it moves out of the range? How to roll this spread? And to say" If you think it will go to 70..." Dude if people knew it would go to seventy why not just buy the call only. BTW your discord is not free. The main discord channels that you show in your video are all paid. Just another bored trader trying to sell education instead of minting his millions and billions.....ha

@tommycryptic

10 ай бұрын

He literally said in the beginning that this strategy is for when you expect big moves either up or down but you're not sure where it'll go. He mentioned earnings and fed meetings. This strat is perfect for earnings plays imo. Stay mad. 😢

I totally agree with what you are saying….The fact is, BTC is the future of crypto and the questions traders ask themselves now if this is right time to invest? before jumping into conclusion I think you should take a look at things first. for the past few days the price of BTC has been fluctuating which means the market is currently unstable and you can’t tell if it is going bearish or bullish. while others still continue to trade without the fear of making lose, others are being patient. it all depends on the pattern with which you trade and also the source of your signals. I would say trading has been going smoothly for me, I started with 2.5BTC and I have accumulated over 6.11 BTC in just three weeks, with the help given by expert trader Tracy Quincy

@frankocean7867

2 жыл бұрын

How can I seek her guidance and Expertise?

@gabrielchristos4099

2 жыл бұрын

After watching so many KZread tutorial videos about trading I was still making losses until Mrs Tracy Quincy started managing my investments now I make $7080 weekly. God bless Mrs Tracy Quincy she’s been a blessing to my family

@alexpunsky2976

2 жыл бұрын

Using a good Coach like Mrs Tracy Quincy to buy and day trade takes away the complexity and makes you incredibly successful.

@thomasbernardo2148

2 жыл бұрын

If I hadn't met Mrs Tracy Quincy I would have lost both my money and my interest in crypto trading

@kirby3908

2 жыл бұрын

@@thomasbernardo2148 it is really refreshing to see a comment about Mrs Tracy Quincy I got a chance to benefit from her services a few months ago and it has been a very smooth experience

He never gives us the link to how to close

@kroover

5 ай бұрын

To close you have to do the opossite operation. Sell what you bought and buy what you sold. Same amount, same strike, same expiration date.

those orders never get filled

i have been making losses trying to make profit trading. I thought trading demo account is just like trading the real market... can anyone help me out or at least advise me on what to do?

🧠

This type of trade appears to be very stock specific. You cannot get the same of low risk setup on something like SPY.

Imagine actually doing this. You’d get instant collateral and be fucked. Why even share this trash?

@pacifictv7214

2 жыл бұрын

How so?

I LOVE LEAN 💜💜💜💜💜

Why won't stupid robinhood let me select multiple options at the same time like you?? It says that i can only place one at a time!!

@lj4001

2 жыл бұрын

What Level is your account at?

😎, 👇📱🦋

This trade doesn't make sense to me. It's a short butterfly and you usually get a lower credit than your max loss. The P/L is that of a long butterfly. Unless it encompasses an earnings date then something just doesn't seem right. That looks like a low budget platform like Robinhood.

Donate

Why are people poor then 😂

No way your getting a $427 credit on any stock with high IV. Sure you can with low IV but that is because you are expected to lose as it isnt likely to move enough.

What is the best way to find stocks to trade this strategy with?