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Much like the condor or iron condor, the butterfly spread is another popular trade among options traders. This spread also has an “iron” version (a spread that incorporates calls & puts) and has the potential to earn more than the iron condor at a quicker rate. The larger and quicker returns also come [...]
I’ve had some changes since I wrote many of the articles on my education section so I think it is time to revamp them. I plan on adding a butterfly, broken wing butterfly, and back spread section since I trade them quite often.
Leave a comment, send me a tweet (@victormora), or send [...]
In options trading, it is not always optimal to place the same spread on the same underlying month after month. This is because conditions change: implied volatility (IV) levels as well as the skew/smile of an underlying are very dynamic. Most retail brokers as well as free sites provide access to historical IV data or [...]
Under the scan tab, Thinkorswim has a built-in option spread scanner called Spread Hacker. It seems like Thinkorswim has programmed this feature to only search for credit trades. If you like trading credit spreads like I do, then this is a useful feature.
First, your credit spread rules need [...]
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SPY Volatility Cone at the 7/29/11 Close
A quick update as to what option sellers are accepting a reality, in terms of volatility, when they sell Friday’s volatility levels:
Here is a quick definition of the volatility cone from Gustavo at Gustavo Trades:
The volatility cone displays what you are “accepting” as the [...]