Broken Wing Butterfly Class 1 Index – 84 minutes
Time | Subject |
1:28 | Our goal is to teach you how to trade! |
6:17 | Our objective in this track is to teach the skills needed to develop your own strategies and adapt them to changing conditions using Broken Wing or Unbalanced Butterfly T+0 profile trades. |
6:43 | Here is what a basic level of knowledge of options spreads means. |
8:31 | Topics and 4 Major Trade Stages. |
9:38 | The three major indexes we use are RUT, SPX, NDX and assets over $500. Be cautious with position size in individual assets due to the specific risk associated with individual stocks. |
10:22 | M3 Entry Configuration Acronyms. Here is a reference list of acronyms for the M3 Trade. |
12:57 | What is a Broken Wing Butterfly Profile T+0 Trade? |
14:10 | Each variation of ENTRY will react similarly, assuming the following modifications… |
16:32 | The major difference in the reaction of the strategies is not the entry configuration but rather… |
17:09 | Majority of risk should be in the direction of greatest perceived risk. Here is an NDX example in OptionVue. |
19:13 | Here are some general differences no matter which configuration you use. |
20:32 | Risk off adjustment strategy explained. |
21:58 | Example of different days to expiration on entry. |
22:21 | Where do I put the short strike or upper long strike compared to the asset price? |
24:17 | Upper Wing Size vs. Lower Wing Size. |
25:09 | How do I choose the best Wing Width for the asset that I will be trading? |
30:24 | If you don’t like your wing width you can vary it. |
35:13 | What is the right number of days to expiration? Every DTE has advantages and disadvantages. |
40:34 | There is no “correct” location for entry in general. There is only a correct location for specific objectives and even that will vary from situation to situation. |
41:35 | It is best to watch the pricing of your position over a period of time and discover what is “normal”. |
45:39 | This is probably the least significant factor unless you have a specific condition you are trying to take advantage of, although you will need to correct Delta for them to behave equally. |
56:39 | Optimal entry Delta will vary depending on DTE and adjustment strategy. Gamma in all cases should be as close to ‘0’ as possible. |
57:57 | Here are the suggested entry parameters for conservative traders. |
59:43 | What should my planned capital and my Profit target be for this type of trade? What is the expected profit and Max loss for this type of trade? |
1:05:01 | Question is asked about initiating a trade with split upper long strikes to get a better profile and if that would be a problem? |
1:09:28 | Brief overview of upside adjustment strategies that will be covered in Part 2 of the BWB Master Class Series. |
1:11:56 | Upside adjustment example in OptionVue, July 2016 expiration using NDX as the underlying. |
1:16:32 | Risk Off only upside adjustment example in OptionVue, July 2016 expiration using NDX as the underlying. |
1:22:12 | Condorizing upside adjustment example in OptionVue, July 2016 expiration using NDX as the underlying. |
Broken Wing Butterfly Class 2 Index – 93 minutes
Time | Subject |
0:19 | M3 Entry Configuration Acronyms. Here is a reference list of acronyms for the M3 Trade. |
0:40 | Each variation of ENTRY will react similarly, assuming the following modifications… |
1:50 | Generally the Further from expiration and further back from the asset price the trade is the more… |
2:44 | Here are some slide corrections that were made to Part 1 of the BWB Master Track Series. |
4:03 | List of upside adjustment strategies and their acronyms. |
4:40 | Why can’t I just enter the same Trade configuration every month and use the same adjustment strategies and have it work? |
9:28 | Risk Off – Raising the expiration graph in one direction is most commonly accomplished in 3 ways. |
12:45 | Verticals can be done at any location. |
17:51 | What are the characteristics of Risk Off Only Adjustment Strategy on a BWB trade? |
24:22 | Example trade BWB Risk Off Only adjustments in SPX using Apr 2016 exp. This example shows 3 different types of upside adjustments to the trade. |
36:19 | Risk off adjustment and then roll up if market goes too far instead of sitting there hoping the market has a big reversal. |
38:17 | Characteristics of BWB trade with a Risk Off and Roll Up adjustment strategy assuming a “neutral market posture”. |
38:57 | Example trade BWB Risk Off and Roll up adjustments in SPX using Apr 2016 exp. |
44:02 | Example trade BWB Risk Off and Stretch up adjustments in SPX using Apr 2016 exp. |
47:56 | Partially enter trade and scale in only if price rises a predetermined amount. |
49:09 | Partially enter trade and scale in only if Greeks go outside predetermined parameters. |
49:45 | Partially enter trade and scale in after a predetermined amount of time has passed. |
50:12 | Overview of the characteristics of different Scale in Strategies. |
52:45 | Example Trade BWB Risk Off and Scale in by Price / Scale in by Greeks in SPX using Apr 2016 exp. |
57:44 | Example Trade BWB Risk Off and Scale in by Time in SPX using Apr 2016 exp. |
1:07:54 | Example Trade BWB Risk Off and Scale in by Time and Variable expirations in SPX using multiple expirations. |
1:18:28 | Gradual Condor Transition or M3/Rock Transition Up Adjustment strategy. |
1:20:22 | Overview of the characteristics of different Gradual Condor Transition Strategies. |
1:22:21 | Example Trade BWB Risk Off and Gradual Condor Transition in SPX using Apr 2016 exp. |
Broken Wing Butterfly Class 3 Index – 83 minutes
Time | Subject |
2:25 | M3 Entry Configuration Acronyms. |
2:43 | BWB Common Upside Adjustment Acronyms. |
2:50 | Downside Adjustment Strategy Designations. |
3:40 | Exiting is an extremely viable downside adjustment strategy long term and often works out better than fighting it out. |
4:46 | Benefits and Drawbacks of using front month and back month puts for downside adjustments. |
9:22 | ITM puts are better for Delta correction when IV has risen significantly. |
10:58 | Benefits and Drawbacks of using short Futures. |
12:25 | Benefits and Drawbacks of using a Bear Vertical for downside adjustments. |
14:33 | Benefits and Drawbacks of Rolling Back the position as a downside adjustment. |
15:21 | Benefits and Drawbacks of using Ratio Spreads as a downside adjustment. |
16:59 | Benefits and Drawbacks of Reverse Price Point Scale In as a downside adjustment. |
19:04 | Example in Optionvue of a Ratio Spread as a downside adjustment. |
33:36 | Can you comment on the idea of spreading off a long put? |
34:50 | Example in Optionvue of a Ratio Spread vs. a long put. |
38:30 | Understanding the reactions of adjustment types. |
42:20 | Understanding Volatility effects with down moves. |
46:26 | Graph to demonstrate the effects of Volatility at different points along the price scale. |
49:34 | Example in OptionVue of how the MIV (Market Implied Volatility) number changes as you go along the time and price axis of the option chain. |
54:16 | SPX Broken Wing Butterfly example in OptionVue and how volatility effects the position. |
59:00 | Trade example of SPX Broken Wing Butterfly downside adjustment using Put Vertical. |
1:03:13 | Alternate downside adjustment for the SPX Broken Wing Butterfly trade example, naked put purchase. |
1:06:04 | Comparison of the two previous SPX Broken Wing Butterfly trade examples one with the Put Vertical and the other with Naked Put purchase. |
1:12:30 | Third Example of SPX Broken Wing Butterfly downside adjustment using Roll Back. |
1:14:59 | Comparison of the two previous SPX Broken Wing Butterfly trade examples one with the Put Vertical and the other with Roll Back. |
1:22:13 | If I don’t use combined put and call skews does OptionVue software use only OTM puts and calls for the skew? |
Broken Wing Butterfly Class 4 Index – 111 minutes
Time | Subject |
1:20 | M3 / BWB Entry Configuration Acronyms. |
1:32 | M3 / BWB Common Upside Adjustment Acronyms. |
1:36 | M3 / BWB Common Downside Adjustment Acronyms. |
1:43 | Exit Triggers and ROE (Reason to Exit) a trade. |
7:00 | A great plan has many ROE (Reason to Exit) including at a minimum… |
11:09 | Here are some optional exit criterion to consider. |
17:00 | Stress and Indecision – “I must not lose this trade” or “I must make money on this trade” is a very poorly structured and impossible goal. |
21:29 | Entry Days to Expiration review from Section 1. |
22:46 | Entry Triggers – DTE, while good for a reference point, is not a great entry trigger. |
25:51 | Entry Triggers – Choose a DTE range based on your objectives and then do the best you can to enter on a “Low Price Day” within DTE criterion. |
27:09 | Entry Triggers – You can’t win if you don’t play!!! |
27:51 | Entry location review from Section 1. Where should I place my upper long strike? Where should I place my short strikes? |
28:42 | Entry Delta review from Section 1. |
29:26 | What should we use for adjustment triggers? |
30:32 | What adjustment triggers should we use assuming a non directional bias? |
36:15 | How does having a weekly call in an M3 trade affect the Vega rule for adjustments? |
38:53 | Price points – effectiveness of using price points as an adjustment. Time – Most typically used as a scale in adjustment. |
42:54 | T+0 Line Projections – What downside and upside projections should I be using for BWB style trades? |
44:05 | How far to adjust?? What are your Objectives?? Are you playing for mean reversion or are you planning for a trend? |
46:01 | It is simple to control capital and reversal risk by rolling in long strikes and making wings smaller and or larger in conjunction with a directional adjustment. |
49:09 | Building Trades – What do you want out of your trade?? |
50:19 | UB2 Trade – SPX M3U BWC RO PC RB. |
52:39 | Entry criteria for example UB2 Trade. |
55:21 | Example UB2 Trade using Option Net Explorer software, initial trade setup. |
59:24 | First adjustment point for UB2 Trade where short strikes are rolled up to adjust Delta/Theta ratio. |
1:01:05 | Second adjustment for UB2 Trade where short strikes are rolled up again to adjust Delta/Theta ratio and too low Theta number. |
1:03:26 | Third adjustment for UB2 Trade where short strikes are rolled up to adjust absolute Theta number. |
1:05:10 | Forth adjustment for UB2 Trade where lower wing is rolled up and narrowed to adjust absolute Theta number. |
1:06:53 | How realistic is the downside projection in this trade example? |
1:10:33 | Here is list of upside adjustment strategies. When should each of these upside adjustment strategies be used? |
1:10:50 | Risk Off – When to use this “Go To” standard adjustment strategy. |
1:12:45 | Risk Off then Roll – When to use the ROR adjustment strategy and when to avoid it. |
1:15:27 | Scale in by Price – When to use SP (Scale in via Price) and when to avoid it. |
1:18:23 | Scale in by Greeks trigger – When to use SG (Scale in via Greeks Trigger) and when to avoid it. |
1:19:42 | Scale in by Time – When to use ST (Scale in via Time Trigger) and when to avoid it. |
1:22:07 | How can you determine if the price of a trade structure is favorable or not unless you have an extensive data set over a long period of time? |
1:27:13 | Won’t using four expirations cycles lower the rate of return for the trade? |
1:29:33 | Gradual Condor Transition – When to use GCT (Gradual Condor Transition) and when to avoid it. |
1:33:39 | Gradual Condor Transition Flat Delta – When to use GCTFD (Gradual Condor Transition Flat Delta) and when to avoid it. |
1:36:38 | Concept on Downside Adjustments – When well inside (near or ahead of short strikes) or in front of the tent you can do this. |
1:40:00 | Concept on Downside Adjustments – As asset price approaches the back of the tent you can do this. |
1:44:21 | Concept on Downside Adjustments – As asset price moves outside the back of the tent you can do this. |
1:45:32 | With the asymmetric risk profile of a BWB trade, shouldn’t rolling down be the adjustment of choice? |
1:49:42 | This concludes the BWB Master Track Series and here is what’s coming next. |