Manage Your Portfolio with Butterflies and Spreads
Dear Profit Takeover reader,
Lately during the Profit Takeover shows on Wednesdays, I have been focusing on education to help you better manage your trades –
Last week, we took a deep dive into butterflies –
And if you missed it, don’t worry – you can watch it right here –
Butterflies are a combination of a debit spread and a credit spread where the sold strikes overlap in the middle –
And that brought up another question about spreads, so –
Yesterday, during the Profit Takeover show I shared all about spreads…
Spreads are a trading strategy to buy an option and sell another option…
If you missed the live show, or if you just want to freshen up your spread skills – you can watch the replay here:
And I look for specific parameters to choose spreads over typical straight calls or puts:
If realized volatility is below implied volatility – I’ll choose a spread.
If skew is steep on the call or put side – I’ll choose a spread.
The volatility skew is the difference in implied volatility (IV) between out-of-the-money options, at-the-money options, and in-the-money options.
Re-watch that show here or check out this info about spreads…
It’s important to learn strategies like butterflies and spreads to minimize risk – and give yourself better chances to make and protect your profit…
Managing your exits is another important part of trading –
Every official trade we put on is tracked in our Profit Revolution online portfolio –
And while I can’t share that portfolio with you,
I can share the exit strategy I recommend for our calls and puts…
Generally speaking, traders are going to buy calls or puts in a grouping of 4 as the entire position – and we manage our exits first by exiting half, then another quarter, and usually let the rest ride as high as we think it could go.
Even if I am not currently live, I am tracking our official trades and will drop exits in the announcements so traders can get out of trades with money in their pocket.
Our first exit strategy for calls is: Exit half of your position at 100% profit…
And we exit the first half of our puts at 50% profit…
I wish I could tell you more – the Profit Revolutionaries have access to all of my specific training and instructions.
If you want to trade cheap options with me, learn more about how and when to implement spreads – and learn from other brilliant traders in our Profit Revolution community…
Join us in the Profit Revolution show every Monday through Thursday at 2:15 p.m. (ET) and Friday at 12:00 noon (ET).
Or click here to find out more info about what we are currently trading.
Founder, Profit Takeover
June 02 2022
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