EPISODE 2; Bearish Butterfly
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.*
Using the planned capital in this trade of $50,000 that results in about a 20% profit.*
***PLEASE NOTE: This trade survived and then thrived through March 22, 2019 which was one of the largest one day moves to the downside in the Russell 2000 or RUT index we’ve ever seen.
Description of this trade: The Bearish Butterfly is designed to maximize results in very choppy and bearish market conditions on the Russell 2000 or RUT index. It is also one of three primary trading structures that are used in the ROCK trading system.
Minimum Capital Required: $5,000 per trade
Example size: $50,000 planned capital
Profit Target: 30% (or $15,000 for this example) / Reduced at 21 DTE (Days To Expiration) of 10% (or $5,000 for this example)
Exit Loss Trigger: 30% (or $15,000 for this example)
Entered Trade: 56 DTE (Days To Expiration) As a butterfly with 50 point wings with the short strikes approximately 20 points below the money.
Trade Duration: 36 days for this example
Trade Adjustments: If the market comes down, roll the position to ATM (At The Money). If the price goes up, we are going to “scale in” or make our position size bigger.
Overlapping Trades: Yes
Why do I love this trading strategy? I can get very high returns in choppy and bearish markets.
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The Bearish Butterfly is a rule-based trading strategy that is designed to maximize results in very choppy and bearish market conditions on the Russell 2000 index. The minimum capital requirement for this strategy is $5,000 with a profit target of 10% to 30% which takes about 30 minutes a day to manage. Click here to learn more!
The Bearish Butterfly is also one of three primary trading structures that are used in our highest yielding strategy, ROCK trading system.*
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SEE OTHER BEARISH BUTTERFLY WINNING TRADE EPISODES!
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.*