Hari Swaminathan – Backspreads, Diagonals and Butterflies – Advanced Options Strategies

ABOUT THIS COURSE

THIS OPTION SPREADS COURSE COVERS THREE (3) ADVANCED OPTIONS STRATEGIES – BACKSPREADS, DIAGONALS AND BUTTERFLY SPREADS

SECTION I – BACKSPREADS AND RATIO SPREADS

Back Spread and Ratio Spreads involve putting on an unbalanced amount of Long and Short Options. If we have more Long Options than Short, the position is called a Back Spread and if we have more Short Options than Long, the position is called a Ratio Spread. In a Ratio spread, you have unlimited losses on one side because you have more Short Options. The Back Spread is part of the BUSY PROFESSIONAL SERIES can be constructed in many creative ways, and we show you how you can manage different strike prices as well as different ratios of Long and Short Options to construct an optimal Back Option Spreads. We don’t recommend Ratio spreads as they have an unlimited loss potential.

What you will master

What is the philosophy of Back spreads and Ratio spreads
Different creative possibilities with the Back spread
How should we look at the Greeks in a Back Spread
Importance of understanding the “Valley of death”
How should we avoid the valley of death
Why is this a Volatility strategy
Why do we not recommend a Ratio spread
Why is the back Spread a great trade for the busy professional

SECTION II – DIAGONALS AND DOUBLE DIAGONALS

The Diagonal is a variation of the Calendar time spread, and it tends to reduce the Vega exposure of a Calendar spread. Due to this fact, it also has a Delta bias when the trade is put on. It is important that you understand and become a master at trading Calendar spreads before you try a Diagonal spread. Although the Diagonal has very similar characteristics as a Calendar spread, the Diagonal is a complex variation of the Calendar spread. Just like in Calendars, the easiest adjustment to a Diagonal spread is to convert it into a Double Diagonal on the losing side, and the course covers this adjustment in detail. You will also benefit from a higher Theta decay than in regular Calendars, however the compromise you make is that the risk exposure in higher than a Calendar, and you also have a Delta bias.

What you will master

What are Diagonals and how do they differ from Calendars
Why are they difficult to adjust
What are the normal adjustments for a Diagonal
How the double diagonal increases your profit zone and your max profit area
Why does Diagonals have better Theta decay than Calendars
Why do Diagonals reduce the impact of Vega
Why is there a higher risk in Diagonals than Calendars

SECTION III – BUTTERFLY SPREADS

The Butterfly is a low risk, high reward, and low probability strategy. The Butterfly involves 3 different Options including Long and Short options, so it can be a bit difficult to manage once its put on. But the Butterfly can produce great results if it works, and in many cases the cost of the Butterfly is minimal, and if you’re lucky, you may even receive a credit for the Butterfly. Both these trades are generally put on by hardcore Options traders. The Butterfly trade should not be your regular “bread and butter” trade in the sense that you can’t rinse and repeat this strategy all the time for consistent monthly income. But the Butterfly can be an excellent strategy in very specific circumstances – like protecting the losing side of an Iron condor or a credit spread. Another great application for the Butterfly is during an earnings report. Both of these specific applications are covered in detail in this course of Advanced Options Strategies.

What you will master

Why is the Butterfly a low risk, high reward strategy
What is the probability of the Butterfly producing fantastic results
How do we adjust Butterflies
Why the Butterfly is a speculative strategy
Why is the Butterfly not a “bread and butter” trade
What are the specific instances where a Butterfly can work
When does the Butterfly generate its maximum profits
How can use Butterfly trades as a hedge to protect our monthly income strategies

Category:Business
Tags:optionstrading advancedoptionstrading calendarspreads diagonalspreads butterflyspreads timespreads horizontalspreads business

WHAT’S IN THE COURSE?

Over 10 lectures and 2 hours of content!
Learn about three advanced strategies – Backspreads, Diagonals and Butterfly spreads
Learn how the Backspread can be constructed in very creative ways
Why the Backspread can be a monthly income strategy and a Volatility strategy at the same time
What are the differences between a Calendar spread and a Diagonal
Why the Diagonal spread is considered an exotic strategy
Learn about the very exciting Butterfly spread
What are the best times to trade a Butterfly spread
What are the specific applications of a Butterfly spread that can make it a very powerful weapon in your arsenal, especially if you have losing trades

COURSE REQUIREMENTS:

Options basics, Call and Puts and Vertical spreads
Options adjustments and Spread adjustments
Calendar spreads (for Diagonals)
Credit spreads (for Butterfly spreads)

WHO SHOULD ATTEND?

Options traders with all the basic knowledge and want to expand their knowledge of more advanced strategies

CURRICULUM:

Section 1 – INTRODUCTION TO BACKSPREADS AND RATIO SPREADS

Lecture 1: Discussion of the Backspread
08:32
Lecture 2: Demonstration of the Backspread
20:20
Lecture 3: Discussion of the RATIO SPREADS strategy
11:27

Section 2 – DIAGONALS AND DOUBLE DIAGONALS

Lecture 4: Discussion on the Diagonal spread
05:32
Lecture 5: Demonstration of the Diagonal trade
22:35
Lecture 6: Demonstration of the Diagonal spread using Chipotle Mexican Grill (CMG)
09:00

Section 3 – BUTTERFLY SPREAD

Lecture 7: Discussion of the Butterfly spread
03:31
Lecture 8: Demonstration of the Butterfly spread
08:11
Lecture 9: Specific application of a Butterfly
13:19
Lecture 10: CONCLUSION
04:53

Hari Swaminathan – Backspreads, Diagonals and Butterflies – Advanced Options Strategies