This trade triumphs through unfavorable market! Even with an implied volatility (IV) that was unfavorable to broken wing butterfly trade structures, the V32 trading strategy persevered and gave a nice return. Click here or in the video below to follow along with this trade to the profitable conclusion in episode 47 of the Winning Trade.
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Description of this trade: The V32 is a dynamic shorter-term broken wing butterfly style strategy designed to be traded on the Russell 2000 (RUT) index. Follow this trade on our Options Trading for Income by the Guidelines weekly webinars.
A broken wing butterfly trading structure is selling options at a particular strike and then buying options at a higher and lower strike. Click here for a full length video on Becoming A Broken Wing Butterfly Master!
Minimum Capital Required: $3,500 per trade
Example size: This is a 10 lot which means there are 10 butterflies. The planned capital, or the maximum amount of capital we would put in this trade example is $35,000.
Example loss trigger: $250 per butterfly or $2,500 in this example
Profit Target: None. In general, we expect about 5% to 15% return on planned capital in a winning month.
Exit Loss Trigger: 7.1% of planned capital or $2,500 for this example
Trade Entry: 30 days to expiration or trader may also choose the variable entry option. With the variable entry option, the entry date and expiration cycle will vary based on IV skew and exit date of previous trade.
Trade Duration: 30 days
Trade Adjustments: Upside and a downside adjustment strategy
Overlapping Trades: No
Historical Win Rate: 80%
Trading Strategy Notes: The V32 is what we call a positive Delta strategy. Meaning if the trade goes negative Delta we are going to make an upside adjustment to make it positive Delta. We are going to do that by rolling in the upper long strikes. Also, to keep our capital under control we are going to roll up the lower strikes.
Why do we love this trading strategy? The strategy does not overlap, meaning there is only one position to manage at a time which makes the position extremely simple to manage. Did I mention that the v32 was one of our top performing trading strategies in 2020?🙂
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The V32 is a simple options trading strategy that is easy to manage and can be traded with as little as $3,500 per trade. It is a shorter-term broken wing butterfly style strategy designed to be traded on the Russell 2000 (RUT) index.
This rule-based strategy has a minimum capital requirement is $3,500 and takes about 15 minutes a day to manage. Click here to learn more!
Join us each week as we track this trade as well as 11 other powerful strategies each week!! Become a GO or a PRO member to follow this trading strategy on the Options Trading for Income by the Guidelines weekly webinars. This trading strategy is for Trading Success Blueprint traders in Stage 3 and above to focus on.
See other exciting examples of the V32 options trading strategy in action! Watch these The Winning Trade episodes:
Episode 35
Returns of this trade: This V32 trade earned approximately 22.5% of planned capital in only 30 days!*
Episode 27
Returns of this trade: This V32 trade earned approximately 17% gain in 29 days despite crazy market volatility!*
Episode 20
Returns of this trade: This trade earned about $1,830 profit using about $27,000 in capital. Calculating with the full $35,000 planned capital that results in about a 5.2% profit in 28-days.*
Episode 9
Returns of this trade: This trade earned about $1,800 profit using planned capital in this trade of $35,000 that results in about a 5.1% profit in 30-days.*
*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.
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