I set a new spread today in the SPY. I typically don’t trade the SPY spreads, but I have a new method to trading butterflies that I am live/practice trading on the small contracts. I have done some extensive research on this simpler and more capital effective approach. I do have a lot of different approaches and styles when it comes to my repertoire for butterfly trading, but I am always looking to improve and grow. Now my main butterfly that I trade is still and always will be traded, but I’m looking for the solution to a slow grind higher with volatilities staying cheap for an extended period of time.
The idea that I have is to reduce the capital exposure, but also maximizing profit potential. This style of butterfly is mostly managed by the greeks with Delta being the most important. For this approach I don’t really care where the market is going, just as long as its not a fast up or especially down market.
Below is my first live trade with this approach. And as always I will keep the updates coming.