The debit spread matures over time and gives you a nice little profit zone to the downside. I take the naked out off at 95% profit or 30 DTE, so you have a paid for put debit spread all by itself for 30 days.
I think @Sweet Bobby's strategy is based on Tom King's 1-1-2 options strategy, described here: https://optionstradingiq.com/tom-king-1-1-2-income-strategy/ The NetPremium must be positive, ie. NetCredit. This can be achieved by the leg with the 2 short Puts, ie. the credit of them must be more than the debit for the put debit spread (the other 2 legs). Something like this example:
Booster, if underlying falls into the main profit area of the strategy. Yes, it works also w/o the put debit spread, then of course w/o the booster.
Good job! Thank you. Looks very interesting. Let me see if I can make it work. By the way, the reason I want to trade butterflies, I like to find ways to pay for my long speculative bets.
Hmm. the butterflies are net debit. But you could do it with the "2"-leg of the 1-1-2 strategy, ie. let it pay for your longs; if necessary simply increase the qty ... Since this should be a Delta -0.05, this means about 95% success rate... For this see also the note in the link I provided above. Btw, if your platform does not show the Deltas, then with such a following tool you can try to find an option with the desired Delta: https://optioncreator.com/options-calculator Or use a tool that scans automatically a range of parameters for a given Delta... (requires some programming when done as DIY) The Tom King video describes the 1-1-2 by himself:
You arent alone.Long options really aren't about win rate..If win rate is high on the checklist,short premium or delta 1 is the way to go.
Yes, you are correct. After a decade of practice, I only managed to win about 30% of my trades. It is like venture investing.
You missed my point, I wasn't looking for credit, I was looking for very high win rate limited risk and limited payoff trades.
I use different strategies based upon how I am already poisitioned relative to how the market is moving. I will use verts and diagonals and ratios and calendars. I consider myself more of a risk manager than a speculator. I use correlations and volatility between instruments and DTE's moreso than directionally biased trades. But every now and then I might sense an imbalance and take a directional view.