Over the last six weeks we have been riding the stock market roller coaster. We’ve had the fastest 30% drop in the SPX AND the fastest 40% drop in the RUT! Many stocks are down 70% or more. And yet, this amazing trade wins through the huge drop and bounce.
Many traders ask, “Can you make money in a non-subjective monthly income strategy through this kind of volatility checking your position only once a day?” The answer is YES! You can see an example in this episode of The Winning Trade by clicking here or in the video below.
The Bearish Butterfly trade is designed to take 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. Over all it’s designed to maximize results in very choppy and bearish market conditions.
We call it a scaling in, negative Delta trade meaning if the market goes up we’re going to increase our position size. Generally if the market goes down we are going to take some money out of the position and roll it back.
Returns of this trade: This trade earned approximately 17% gain in 39 days through a down move of over 40% in the RUT followed by a bounce of over 200 points. AMAZING!*
Minimum Capital Required: $5,000 per trade
Example size: $50,000 planned capital (Planned capital is the maximum amount we are expected to get in the trade.)
Profit Target: 30% (or $15,000 for this example). This trade has a reduced profit target of 10% should the trade get 21 days to expiration (DTE) and the exit loss trigger on the position is 30% of planned capital.
Exit Loss Trigger: 30% (or $15,000 for this example)
Entered Trade: 56 days to expiration with 50 point wings with the short strikes approximately 20 points below the money.
Trade Duration: 39 days for this example
Trade Adjustments: If the market comes down, roll the position to ATM (At The Money). If the price goes up there are a series of price points where we adjust and add to the strategy.
Overlapping Trades: Yes
Why do I love this trading strategy? This trade wins through the huge drop and bounce! It is just awesome!
LEARN THIS TRADING STRATEGY!
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!
FOLLOW THIS STRATEGY!
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 4 and above to focus on.
SEE OTHER BEARISH BUTTERFLY WINNING TRADE EPISODES!
Returns of this trade: This trade earned about $11,592 profit or approximately 23% gain in 38 days.*
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.*
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.*