Butterfly Options Trading System
Your membership to Crestrade will include alerts from the Butterfly Options Trading System:
|Butterfly Options Trading System Specifications|
|Perfect for:||Traders seeking huge max profits on aggressive, extremely high-risk funds|
|Trading Style:||Options Trading|
|Average Hold Time:||2-6 weeks, many through expiration|
|Trade Frequency:||2-5/month, max of 4 simultaneous open positions|
|Focus List:||Any stock or index with highly liquid options|
|Strategy Objective:||Steep "max profit" spike 2-18 times amount risked, probability of profit greater than 20%|
|Profit Goal*:||100%-1800% profit per trade based on amount risked (buying power used)|
|Risk Control:||Defined Risk Approach limits loss to buying power used|
|Alerts Used:||Entry and Exit Signals through a Trade Alert Email, Live Trading Room and Trade Forum (demo)|
|Delivery Method:||All can be delivered to Computer, Smart Phone and Tablet via instant messanger and emails|
* Note that 100% of amount risked could be lost on options spreads, and that profits are NOT guaranteed on ANY trade. Please allocate funds responsibly.
What is a Butterfly Options Spread?
Butterfly Spread Defined: An options trading strategy combining a bull and bear spread. It uses three strike prices. The lower two strike prices are used in the bull spread, and the higher strike price in the bear spread. Both puts and calls can be used. A very large profit is made if the stock is at or very near the middle strike price on expiration day.
What it means: When you enter a Butterfly Spread, you are actually entering 3 options orders at once. If the stock remains or moves into a defined range, you profit, and if the stock moves out of the desired range, you lose. The closer the stock is to the middle strike price on expiration day, the larger your profit.
EXAMPLE: Take a look at what the order looks like on a Butterfly on the stock EBAY where we buy 1 put option with a strike of 47.50, sell 2 put options with a strike of 45, and buy 1 put option with a strike of 42.50. The result is a complete trade that gives us a 0.55/contract ($55) DEBIT to our account (for each contract we choose to do).
The price of EBAY at the time of this trade was 43.81.
EXAMPLE: Now look at the profit and loss scenarios that could occur on the trade we entered above. As you can see, if the stock stays near its current price, we'll make money. We want it to close as close to 45.00 as possible, as that is where our max profit point is. We are profitable anywhere from 43.05 - 46.95 and have a max loss of only $55. This, when compared to the max gain of nearly $200 per contract, makes this a very attractive trade.
Expert Analysis leads to Expert Results
With Butterfly Spreads, we are going for "Home Run" profits: When we look for Butterfly Spread trades, we are looking for options trades that have an extremely high level of profit compared to amount risked with a reasonable range of profitable price points (called the sweet spot). We look for options that have higher levels of implied volatility than we believe is realistic. The amount risked will always be substantially lower than the maximum profit on our Butterfly Options Spreads.
Our Options Trading experts scan the market looking for the best Butterfly Spread trades that meet these criteria:
- Current Stock Price near Max Profit Point -- We do not want the stock to have to move big in order to profit big. In fact, most of our butterfly options spreads will have a max profit point within 3% of current stock price.
- Steep Profit Range -- Our Butterfly Options Trades typically have a maximum profit of 2-15 TIMES the amount of money risked. When the stock price settles in our predicted range, it is a major boost to your portfolio.
- VERY LOW max loss -- Butterfly Spreads sent by Crestrade have an extremely low, well defined risk. In fact, most of our Butterflies can be traded with as little as $100 risked per trade! Options Trading is about controlling risk, because you will never be correct on 100% of your trades.
Real-Time Alerts for Entry AND Exit
Understanding not only WHAT to do, but why we are doing it is essential to your long-term success in options trading. At Crestrade we believe strongly in the value of education and improving the trading ability of our members.
You will always know exactly where we stand on every trade, every day. We will send you real-time entry AND exit trade alerts via email and our Live Trading Room (Click here for demo) along with our online trade forum to keep you fully up to date on every position. Each alert and update comes complete with an expectations and analysis movie (view demo) that includes entry price limits, stop loss levels and profit targets to insure that you always know exactly what is going on with every open position in your account!
Options Trading that works with YOUR Schedule
Every options trade alert that we send is sent with the busy professional in mind. In fact, once you receive a trade alert from us, you can be confident that the trade can be made anytime within the next 24 hours. In other words, you will NOT need to be at your computer all day in order to enjoy the full benefits of our Options Trading System!
Butterfly Spreads are a defined-risk, extremely high-reward strategy that go for huge max profits on every trade. The Butterfly Trading System is a part of the Crestrade Options Trading System.