@.sigma , I've read Cottles' books, never used his software, but the cynic in me thinks it's just a trademarked fancy name for some custom software, to increase his revenue income. You can get it here for $1189 : https://www.diamonetrics.com/ or here for $849 https://riskdoctor.com/Diamonetrics_Java.htm. I'm not in any way recommending it, and I doubt if many people use it. If it's just pricing flies you're after, then lots of normal software can do that (eg. Option Net Explorer). If it's something more unique, then it's possible to hire someone on Upwork.com to write a python script for less than $200 (I've actually done that twice) - the script can get the real-time mid prices for various strikes, and plot fly charts of them to give you a better visual picture. Good luck.
Jeez, a thousand greenbacks to place a diamond grid on a chart and for some risk profiles of various fly strikes... but hey we all gotta eat
I don't like flies for breakouts because my experience shows vol spikes into breakouts as you mentioned. The OTM body I'm short is now causing me gamma and vega losses. At some point vols will drop after the breakout but because you don't really know where the underlying will be relative to your body, this is a problem if underlying is not ATM at your body. Re the TSLA fly: I was forecasting a body pin which would see the fly go north of 25. It's a trade call, nothing to do with fly structure. Maybe it's just the way I trade ops, but I do actually take into account max loss. I'm usually long debit and not initially short gamma which is why. My rule of thumb for profits is no less than 50% of debit, but that's just me.
As of today, Trade I placed on 12-8-20, just before my OP, trying out different bodies: Trade I placed on 12-17-20, a week after my OP: I moved away from butterflies on thinly traded options and focus on SPY butterflies because I found out with thinly traded, it was very difficult to exit my positions without taking a huge haircut from bid/ask. My bread and butter trades are still single leg directional. These are work in progress trades to allow me to collect statistics on expectancy, win rate, etc. Short answer is yes. Textbooks don't tell you how to set up and manage your butterflies. Study his posts carefully and you will find your answer. Until I can collect enough statistics, the jury is still out as to whether I have a winning strategy. So far it is encouraging. To my fellow amateur retails: Don't give up. Happy New Year to all.
Well done, today I exited my first butterfly after being inspired by this thread. how likely it is to have an early assignment on spy etf? and how early can it be? I notice that premiums have better spread on spy than spx but I wouldn't want to manage unexpected assignment.
Good for you but I think you simply were lucky SPY did not go down. That combined with some vol increase would have ended less rosy. To me this doesn't look like a destry style fly. You were bullish while most of his flies are directionless and shorter. Also your apparently excellent ROI of 35% gets diluted by the number of days so you end up with 1.7% per day. You could have exited in half time for roughly same ROI, but you pushed your luck. It worked this time.
Excellent observation. Posts like your will suck me back to posting on ET again. I don't want to be defensive and defend those trades. I posted them because someone asked for examples. But let me explain: I never say I traded like @destriero, he inspired me to searched for my own profitably butterflies. I am a directional trader, these were indeed bullish directional trades. Did I get lucky? Perhaps but I was following a scrip and collecting statistics on the trades. Finally, can you explain what is @destriero style fly? Thanks.
All I can tell is most of his flies seem to be 132 type for less than 2 weeks till expiration that he closes in 2-5 days. Don’t remember him ever mentioning repairs. How, when and why he chooses to place them is in the dark for me. I’m a visual guy and don’t speak Greek.
@.sigma - Here's an example of a fly not filling at nat. I've had an offer of 0.09 out for the past half an hour or so and have seen nat momentarily drop as low as 0.06; still don't have a fill. Just tried it in TradeStation - same behavior. P.S.: It filled about two minutes after I posted this. This is proof - proof, mind you! - that the lizard people are watching ET and are afraid of us. Powah to the People!!!