The Bearish Butterfly Trading Strategy is a time tested strategy that is being tracked on the weekly Options Trading for Income webinar series and has been since 2012. It is designed to maximize results in very choppy and bearish market conditions on the Russell 2000 or RUT index. It is also one of the three primary trading structures that is used in the ROCK trading system.
The minimum capital required for this trade is $5,000 per trade and the profit target is 30% which is reduced at 21 days to expiration to 10%.
In the video above you will find details of this trading strategy, plus four examples of how this trade performed in 2019. If you would like to see more examples, please click on the links below or click here for all of The Winning Trade episodes.
This income strategy is designed to work best when the market goes up a certain amount and then reverts back to the mean or a little lower than the mean. It is a great alternative to bearish vertical positions.
In more technical terms, it is a scaling-in, positive Theta, negative Delta, mean reversion options trading strategy that performs extremely well in a large variety of market conditions.
Episode 11 – Bearish Butterfly Trading Strategy
Returns of this trade: This trade earned about $10,000 profit with a maximum capital in it of about $16,000 or about 60% of actual capital.*
Episode 2 – Bearish Butterfly Trading Strategy
Returns of this trade: This trade earned about $10,000 profit with a maximum capital in it of about $19,000 or about 50% of actual capital.*
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