In this episode, we are showing an example of The Bear strategy, also known as the Super Simple Bearish Butterfly win. This trading strategy takes advantage of a variety of markets such as overextended up trending markets, volatile, and very volatile sideways markets, as well as volatile down trending markets, and smooth down trending markets.
Take a look at the video below to see how it performed in this Winning Trade episode.
Returns of this trade: This trade earned about $536 profit or about 10% of the planned capital.*
Description of this trade: The Bear is completely systematic and was designed to be traded on the Russell 2000 or RUT index. It is a great hedge for long portfolios. The trading strategy includes a technical filter that gives the trade a higher probability of success!
Minimum Capital Required: $5,000
Example size: $5,000 planned capital
Profit Target: 30% or $1,500 in this example
Exit Loss Trigger: 30% or $1,500 in this example
Entry Criteria: First the RUT should be up 80 points or 10% of the asset price in the last 60 days. Second is we would rather not see an overly bullish environment. We generally look to enter the trade somewhere between 45 and 75 days to expiration. Then enter as a standard butterfly with 50 point wings and short strikes between 20 and 30 points below the money.
Trade Duration: Variable
Why do we love this trading strategy? It is a simple trade that is great for slow moving bullish markets and bearish trends without any subjectivity.
LEARN THIS TRADING STRATEGY!
The Bear is one of four trading strategies that are included in the Super Simple Spreads course.
*The result shown is from real-time, hypothetical trades such as those shown in the Options Trading for Income weekly webinar. Simulated trades are believed to be represented as accurately as possible, however, live results may have been different. The result is shared as an example for educational purposes ONLY.