How To Trade A Butterfly Spread On tastytrade
Channel: NavigationTrading
Date: 27/03/2018

What's up navigation traders?!

In this video I want to show you how to set up a Butterfly Spread on the tastytrade platform. We're looking at a chart of XPX, the S&P 500. If you wanted to set up a butterfly spread in SPX, you would go to the trade tab (all the different option chains are shown) and choose the option chain with 30 to 60 days to expiration. You want to stay in the monthlies. That would be right at 35 days to expiration. Then click the drop down, which opens up all the different strikes to choose from. 

When we put on a Butterfly, you can do it as all calls, or as all puts. We tend to do our Butterflies with all calls. Our back tested studies show that they perform just a little bit better, but there's not a whole lot of difference if you do all puts or all calls. With a Butterfly Spread, we're going to sell the at the money strikes, and then we're going to buy the wings above and below the at the money strikes. You're going to sell twice as many as you do the wings. I'll show you what I mean...

Watch the video for more details!

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Happy Trading!

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