Finally! I’ve been talking about it enough and now the video is here! Taa-Daa! Look under New Downloads on the far right column: it’s called “Video – Unbalanced Butterfly”. It’s not the best video, since I had to record it twice and I still don’t feel I covered everything, but it should help a lot in getting you started with this type of spread.
It’s not for every trade, and I wouldn’t hang my hat on this spread working in all situations. What I like about it is using it for Weekly Expirations; where you think the stock will move from the current strike up/down to the next strike. You would set your short strike on the spread at the target strike you feel the price will move to and wait a day or two to see if it moves in the right direction. If it does, you can bag a nice chunk of change.
One thing that I experienced entering these spreads: I have to wait quite a while for TOS to actually fill all the strikes. In a few cases I had to move my Limit price to the ‘Natural’ price in order to get in. So far, that has not eaten into my profits to any objectionable degree. Just remember that if you try these and you have TOS as your broker. Of course, when I was testing them using OnDemand, they executed just fine.
Profit Tent Portfolio™
Yesterday I ‘Condorized’ my IWM Bear Call by adding a Bull Put at 76/74. Basically, Condorizing by my definition is legging into an Iron Condor by initially selling a Bear Call or Bull Put, and then adding the other leg (Bull Put or Bear Call) in the future – thus creating an Iron Condor.
I also added an Iron Condor on OIH yesterday. Now, for this month anyway, my PTP™ is all Iron Condors and doesn’t have any tent-like appearance, but rather looks kind of flat and boring. I’ll take boring if it makes money. I wasn’t happy earlier with the Implied Volatility of the options for February in order to do any Calendars. Besides, I am experimenting with the long options on Calendars with farther out expiration dates. More on that later, of course.