winstonthink 6:52 am on Friday, June 19, 2020

IRBT BWB

#BWB $IRBT BTO Aug 21, 80 / 75 / 65 Broken Wing Put Butterfly for 0.78 credit.

fuzzballl 7:11 am on Friday, June 19, 2020

Expiration?
- winstonthink 7:26 am on Friday, June 19, 2020
  
  Txs – post updated
fuzzballl 7:30 am on Friday, June 19, 2020

I’m not a butterfly guy…is that:

Buy 80’s
Sell 75’s
Buy 65’s
- winstonthink 7:36 am on Friday, June 19, 2020
  
  Correct – you are a butterfly guy!
  - fuzzballl 7:39 am on Friday, June 19, 2020
    
    🙂 🙂
  - winstonthink 7:42 am on Friday, June 19, 2020
    
    The broken wing butterfly has a very interesting payoff profile, especially when they can be placed for a credit. No upside risk, and relatively easy to adjust on the downside – the simplest approach is to close out the complete butterfly and roll down. Adding debit spreads to protect the downside starts to get quickly expensive.
    Another advantage (some would say disadvantage) is that the entire set of spreads in the butterfly holds its premium right up to expiration – hence adjusting before expiration is quite forgiving.
    I’m starting to look at using BWB instead of credit spreads as income generating trades.
    - mortlightman 7:46 am on Friday, June 19, 2020
      
      Interesting
    - fuzzballl 7:47 am on Friday, June 19, 2020
      
      I threw it up on the graph to take a quick look. Makes money all the way down to about 69 also.

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