Our daily expiration trades on SPX and XSP aren’t always winners.
But when we win, we win BIG.
On Friday August 22nd, we hit a wild one.
Traders bought the SPX August 22, 2022 $4150-$4140-$4130 Put Butterfly for $1.22 at 1:02 p.m.
They sold half at $2.60 at 1:52PM—> 113% gain,
Sold 25% at $3.90 at 3:18PM—> 220% gain,
And the trade expired at $7.99—> 555%
For a weighted gain of 250% in just under 3 hours.
But we weren’t just trading SPX. We were also trading a cheaper version of this – the XSP – and we made even more…
Traders bought the XSP August 22, 2022 $415-$414-$413 Put Butterfly for $0.13 at 1:11 p.m.
Traders sold half at $0.28 at 2:04PM—> 115%
Then sold 25% at $0.83 at 3:35PM—> 538%
And it expired at $0.80—> 515%
For a massive weighted gain of 321% in just under 3 hours – and you only needed $13 to get in this trade.
Here’s what makes these trades even BETTER besides the profit potential…
SPX and XSP both settle in CASH – which means, at expiration, you aren’t assigned a stock – you get cash in your account instead.
What could be better than that?
I trade SPX and XSP as same-day expiration butterfly trades, which are a bit more complicated than my typical calls and puts, so take a look at this video where I deep-dive into butterflies and how traders can use them to profit.
I will be unavailable for live shows next week, but I’d love to hear your questions about butterflies or other options trades RIGHT HERE.
Until next time,
August 26 2022