Trying to gradually fill a gold position:
STO GLD Feb 19th 165 Put @ 1.01


In case I’m wrong and the market keeps going up like a SpaceX rocket:
Closed SPY Jan 15th Butterfly. Net loss 4.10.
Still holding SPX BECS hedged with SPY long call.


Not trusting this rally, so:
BTC SNOW Jan 15th 290 Put for 4.60, STO for 7.00.

SPX BECS Hedge Using SPY Long Call

Took advantage of the pullback to buy some cheap insurance for my SPX BECS.
BTO 1 Contract SPY Jan 29th 385 Call for 1.10. Paying $110 now reduced my planned exit max risk from $1000 to $575, almost cutting it in half. Max profit now is $1715.

Come to think of it, since the new SPY call expires after my SPY butterfly, it is sort of an extra hedge for that position too.

New SPX P&L Diagram:

Jan 29th SPX BECS With SPY Call Hedge

SPY Butterfly Risk Reduction

Took advantage of the early rally to rollup the lowest put and eliminate downside risk. Then, took advantage of the pullback to squeeze the upside of the butterfly to reduce upside risk.

Original Butterfly Strikes:
334 / 357 / 380
New Butterfly Strikes:
344 / 357 / 377

Still targeting between $500 and $1000 profit, new max risk is $534 (only to the upside).

Fans of Butterfly trading and of Gavin Mcmaster may recognize this as a “Reverse Harvey” adjustment. Here’s a reference for anyone interested:

Butterfly Course Part 12 – Adjustments!

New P&L Diagram:

Jan 2021 SPY Put Butterfly Squeezed


The BECS Thesis:
SPX is rarely above 15% above its 50-Week MA, and when it is, it doesn’t stay there for very long. Currently, it is 15.9% above that MA and has been as high as 16.7% above it at the recent ATH. The rubber band is pretty stretched, and should pull back at some point, even if it’s done by trading sideways while the MA catches up.

With SPX’s 50-Week MA having risen 43 points over the last month, I am projecting that that MA will be approximately 3261 in 4 weeks (it is 3218 now). Multiplying 3261 by 1.15 equals 3750. Padding that by a little for mom and the kids gets me up to 3800 for the short strike of a BECS.

The Trade:
SPX Jan 29th (29 days)
STO 3800 / 3850 BECS for 18.25 (1 contract)
Capital Allocated: $5000
Potential Max Profit: $1825
ROC: 36.5%
Planned max loss: $1000
ROR: 182.5%

The Plan:
Upside breakeven is at about 3820 on the SPX, and my loss at that point (based on T-0) will be about $1000. If SPX reaches that point, I will roll up and double, based on my bearish thesis above.


Hi folks. I’m new to the bistro, but I’ve been tinkering with options trading for awhile, and I finally decided to start posting some of my trades in case anyone is interested.

This one is a bearish put butterfly that makes money if SPY pulls back. It also would have been profitable if SPY had gone nowhere after I put it on, but the market has been slowly climbing and now it’s nearing its upper expiration breakeven strike. If I were putting this on today I would use higher strikes, so that the trade would be reasonably profitable even if SPY expired right where it is now.

Currently, the position is showing a loss of $89. If SPY continues on up to the point where my loss reaches $250, I will add another butterfly at higher strikes to widen the tent. I will also try to avoid dealing with expiration week gamma by planning to close the week before if I can get any kind of decent profit.

Edit: Thanks to Hawk’s questions, I changed the plan for adjusting if SPY continues up. See the comments below.

Here’s the position:

#Bearish Butterfly

SPY Jan 15th (Monthly)
334 / 357 / 380 Put Butterfly BTO for 7.20
Max Profit $1580, Target Profit $500
Max Loss $720, “Take Action” Loss $250

I’ll update as I manage or close the position. If any of you are experienced butterfly traders I would appreciate any advice! Thanks!

Jan 2021 Put Butterfly