Trading Broken Wing Butterflies

when the VIX is in the Basement

Presented by Greg A. Loehr

Disclaimer

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Hypothetical Trades Disclaimer Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown. All investments and trades carry risks.

Trades Disclaimer

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Access to this webinar is for educational and informational purposes only. Consult a licensed broker or investment advisor before placing any trade. All securities and orders are tracked and monitored in virtual trading accounts. Virtual account prices and returns may differ from actual trading results. Commission costs are excluded. Neither Loehr Consulting, LLC, doing business as OptionsBuzz.com nor any of their respective officers, personnel, representatives, agents or independent contractors are in such capacities licensed financial advisors, registered investment advisors or registered broker-dealers. Nothing contained in this webinar, website or promotional material constitutes a promotion, recommendation, solicitation or offer of any particular investment, security or transaction.

Loehr Consulting, LLC provides educational services that are meant to teach you the risks and rewards of trading stocks and options, and we are not a service that tells you what to trade. We are not implying or guaranteeing any profit. As always, do not trade with money that you can't afford to lose. Please visit www.cboe.com to receive a copy of “Characteristics and Risks of Standardized Options.” Read it.

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Low VIX means a few problems:

1. Lower credit to open trade

2. No credit to open trade

3. Narrower butterflies

4. Closer to ATM

BWB’s in Low Volatility Markets

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•Former CBOE Market Maker 1993-2002

•Trained by Susquehanna International Group

•Co-founder Third Millennium Trading, LLC

•Traded billions of dollars worth of stock and options

•More than 20 years combined experience in options and options education worldwide Greg Loehr

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Are you reading the SMB Blog?

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Are you reading the SMB Blog?

Hypothetical

Trade profit

of 112%

Hypothetical

Portfolio

profit of 38%

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VIX January 14

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Trading BWB’s with VIX below 15

Solutions:

1. Lower credit

2. No credit to open trade

- go further out in time

- go closer to ATM??

- narrower strike selection

- sell OTM call spread to ‘finance’

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Trading BWB’s with VIX below 15

Solutions:

3. Narrower butterflies

- go further out in time

- go closer to ATM??

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Trading BWB’s with VIX below 15

Solutions:

4. Closer to ATM

- go further out in time

- don’t trade it

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VIX January 25

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VIX Yesterday

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Thank You!