{"id":16625,"date":"2012-01-24T13:37:49","date_gmt":"2012-01-24T18:37:49","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=16625"},"modified":"2023-04-04T19:03:19","modified_gmt":"2023-04-04T23:03:19","slug":"the-march-bearish-butterfly-trade","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/the-march-bearish-butterfly-trade","title":{"rendered":"The March Bearish Butterfly Trade"},"content":{"rendered":"<p><em>This post is the first in a series that we will be publishing over the next several weeks, tracking the hypothetical performance of the bearish butterfly trade\u00a0 as it would have been\u00a0 handled\u00a0 according to our guidelines contained in SMB&#8217;s Bearish Butterfly Video Series.<br \/>\n<\/em><\/p>\n<p>On Friday, we initiated the March\u00a0 bearish butterfly trade in the $RUT.\u00a0\u00a0\u00a0 If this was\u00a0 an actual live\u00a0 trade, you&#8217;d need to set aside about $25,000\u00a0 in your account in order to leave some powder dry for adjustments that you may need to make if the market rallies in an extreme manner after the trade commences.\u00a0 At the time that we initiated our hypothetical\u00a0 trade, the $RUT index was trading at\u00a0 784. In accordance with our guidelines,\u00a0 we placed a 5-lot put butterfly, centered at $RUT 760\u00a0 below the market at a cost of 10.23 per lot.\u00a0 So our total initiation capital level is a little bit over $5,000.\u00a0 As of this morning, our position is up a little more than 1% of planned capital, but that means essentially nothing.\u00a0\u00a0 This trade can be active for well over a month in some cases and\u00a0 how the market\u00a0 plays out\u00a0 over time&#8211;and whether we react to it with discipline&#8211; is much more important than the positive or negative P and L that will appear in the early days of the trade.<\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/01\/bb13.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-large wp-image-16655\" title=\"bb1\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/01\/bb13-1024x548.jpg\" alt=\"\" width=\"575\" height=\"307\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/01\/bb13-1024x548.jpg 1024w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/01\/bb13-300x160.jpg 300w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/01\/bb13.jpg 1358w\" sizes=\"auto, (max-width: 575px) 100vw, 575px\" \/><\/a><\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/01\/bb21.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-large wp-image-16656\" title=\"bb2\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/01\/bb21-1024x546.jpg\" alt=\"\" width=\"575\" height=\"305\" \/><\/a><\/p>\n<p>John Locke<\/p>\n<p>Locke In Your Success, LLC<\/p>\n<p><em>Please note:\u00a0 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 commisions. 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.<\/em><\/p>\n<p><a href=\"http:\/\/www.cboe.com\/resources\/intro.aspx\" target=\"_blank\" rel=\"noopener\">Risk Disclaimer<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This post is the first in a series that we will be publishing over the next several weeks, tracking the hypothetical performance of the bearish butterfly trade\u00a0 as it would have been\u00a0 handled\u00a0 according to our guidelines contained in SMB&#8217;s Bearish Butterfly Video Series. On Friday, we initiated the March\u00a0 bearish butterfly trade in the $RUT.\u00a0\u00a0\u00a0 If this was\u00a0 an &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/the-march-bearish-butterfly-trade\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":741,"featured_media":16656,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,1402,1584],"tags":[1994,1629,4688,4698,1598,1259,4693,1801],"class_list":["post-16625","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","category-options-education","category-seth-freudbergs-blogs","tag-bearish-butterfly-strategy","tag-income-options-strategies","tag-options-education","tag-options-mentoring","tag-options-strategies","tag-options-trading","tag-options-training","tag-options-tribe"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The March Bearish Butterfly Trade | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/the-march-bearish-butterfly-trade\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The March Bearish Butterfly Trade | SMB Training\" \/>\n<meta property=\"og:description\" content=\"This post is the first in a series that we will be publishing over the next several weeks, tracking the hypothetical performance of the bearish butterfly trade\u00a0 as it would have been\u00a0 handled\u00a0 according to our guidelines contained in SMB&#8217;s Bearish Butterfly Video Series. On Friday, we initiated the March\u00a0 bearish butterfly trade in the $RUT.\u00a0\u00a0\u00a0 If this was\u00a0 an ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/the-march-bearish-butterfly-trade\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2012-01-24T18:37:49+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-04-04T23:03:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2012\/01\/bb21.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1365\" \/>\n\t<meta property=\"og:image:height\" content=\"728\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Seth Freudberg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" content=\"@smbcapital\" 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