How To Trade A Broken Wing Butterfly

How To Trade A Broken Butterfly

The Broken Butterfly is one of the strategies that we trade at NavigationTrading.

The Broken Butterfly is a great strategy to trade in periods of High Implied Volatility. Since they require a relatively small amount of capital, they can be traded in virtually any size account.

In this video, we will walk you through how to:
1. Evaluate Implied Volatility
2. Locate the correct strikes to trade
3. Analyze the trade
4. Place the trade

Here’s the metrics we look for when trading Broken Butterfly:
- Market Assumption – Neutral or Directional
- Implied Volatility – High
- Trade Setup: Buy 1 ITM Call, Sell 2 ATM Calls, Buy 1 OTM Call
(Adjust one of the long calls closer to the money to reduce or
eliminate risk on one side)
- Profit Target – 15-25% of debit paid
- Downside risk – Defined
- Upside risk – Defined
- Probability of Profit – 35-50%
- Time Decay (Theta) POSITIVELY impacts this position

Want the full step-by-step details on how to trade options? Click below to learn more.

https://www.navigationtrading.com/trading-options-for-income/

Have you tried our 2 week trial of NavigationALERTS? Click below to learn more.

https://www.navigationtrading.com/navigationalerts-2weektrial/

Also, don’t forget to join us every Monday morning at 8:25 am CST, where we broadcast our “Trade of the Week” LIVE from our Facebook page and YouTube channel

At NavigationTrading we consider it a privilege to be your guide on this exciting journey.

Happy Trading!

The NavigationTrading Team
https://www.navigationtrading.com
info@navigationtrading.com

Видео How To Trade A Broken Wing Butterfly канала NavigationTrading