If all calls [qty#/strike-alpha]: 1a x (2b) x 1c x 1d x (1e) Which doesn't reduce classically, so it remains a butterfly + collar.
He trades verticals on some Dow stocks. Hey gang, thanks for the responses, I'm glad to see that he was off base. It just seemed odd to me to think that the two strategies had the same risk profile.
Not directed at traderjb, but in general i just dont understand why those kind of questions keep coming up. Cant all of this just be plugged into a graph, and then adjust 1) days till expiration 2) volatility and/or 3) underlying price And the graph will tell you the exact risk/reward profile for any strategy at any given time ? am i missing something
Unfortunatly not everyone knows about or has access to such graphical tools....even though some are available free of charge.
A good intuitive understanding of how options w**k is more valuable than all the graphs, charts and software in the world. Why? Because a bad understanding will get you arbing covered calls against vertical spreads.