2017 Jan SPX Butterfly

Index butterfly is my butter-and-bread trading every month. I think 2017 off to a good start with my closing position in 2017 Jan SPX Put Butterfly.

As you see, I closed this position with $720! Think about it if you have a larger account and can trade 10X of my position. 

 

Don’t think that option trading is without risk. If you read my transaction carefully, you would agree with me that this may be a painful process. You may need to lose $800 before you make $720. During the process, you do not know if your trading plan would work out.

One thing I like this butterfly strategy is its adaptive nature. At time I initiated the position on 2016/11/30, SPX was around 2200. I closed the position on 2017/1/3, and SPX was around 2260. SPX increased 2.7% during the process, and I made about 20% based on the capital required by this strategy.

Though the nature of this butterfly strategy is not ideal for a bull market, you can still make money when market goes sideway at the end.

joseph

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