All week during the live Profit Takeover shows, I’ve been focusing on breaking down my Daily Double strategy – an opportunity to take 2x profit on my investment every single weekday. 

Here, I broke down the basics of SPX butterfly trades…

Watch this video to learn how to prepare your trading account, the ins and outs of my butterfly setup, and how to take SPX profits home:

But I am still getting some commonly-asked questions that I’d like to answer…

Question: Can I trade your expiration butterflies on SPY?

Answer: No. SPY is not cash settled and my Daily Double expiration plays on SPX are not interchangeable with SPY. Of course, if you have a different method and want to trade butterflies on SPY, I won’t stop you, but my daily expiration trades are not meant for SPY only SPX and XSP.

Question: What is XSP and should I trade it and SPX both?

Answer: XSP is 1/10th of SPX, it moves essentially the same direction as SPX, but it is cheaper, allowing traders to trade more of these than they could SPX on a smaller account. For instance, a trader who could only afford one SPX butterfly, could buy around ten XSP butterflies for nearly the same price. I would not recommend trading both SPX and XSP, and rather just choose one. Another difference is that currently, XSP only trades Monday, Wednesday, and Friday, and SPX trades every weekday.

Question: How do you choose the middle strikes in your butterfly?

Answer: I use a variety of indicators and constantly watch the market all day in order to choose where I think the market will close. I watch VIX, I keep an eye on AAPL, and I take into consideration the news, volatility, and other factors that could play into causing the market to rip, dip, or chop. 

Thanks for these great questions, keep them coming. 

Feel free to ask during our live shows or drop your questions here anytime: Ask Me Anything. 

Sign up right now for your spot in our next live Expiration Trader show on Monday at 2:00 p.m. (ET). 

You’ll be a butterfly trader in no time.

I’ll see you then,

Mark Sebastian


4 responses to “Ask Me Anything About SPX”

  1. Hi Mark. So with SPX and XSP (1/10 of SPX). You can do expiration calls – is this correct ? And expiration calls are ones you do NOT have to close – but you COULD close them for a reason ——.

  2. Why did the market go up at the close on Friday when both you and Voz’s SEXY believed it would go up based on multiple indicators and observations? Just curious since you are usually not that far off.

    I enjoy reading your replies and look forward to your comments. I am just trying to learn more about market dynamics and which variables change so quickly to impact the close so drastically.

    After Thursday I honestly did not think the market was going up at the end on Friday and bought SPX put spreads which turned out very profitable.

    I know you are probably reading this and saying good for him, but I am sincere about learning more.

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