Our daily expiration trades on SPX and XSP aren’t always winners. 

But even worthless SPX expirations can still make profit…

Allow me to explain.

On August 26, 2022, our traders opened the $4100-$4085-$4070 Put Butterfly for $1.10…

They sold half at $2.63 – for 139% gain…

Then they sold 1/4 at $3.50 – for 218% gain…

But then, the fly expired worthless… but traders still made a cumulative weighted gain of 99%.

How is that possible?

When we put on these butterfly trades earlier in the day, the market has more opportunity to move up and down… 

And we have multiple opportunities to take profit during the day. 

So even when the trades don’t pin on the thorax, we can still take home profit. 

And when we do win, we win BIG. 

On Friday August 22nd, we caught a whale. 

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. 

Until next time,

Mark Sebastian


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