Hello Seth,<\/p>\n
Wanted to say thanks for the Webinar presentations provided on the Options Tribe site. It is
\nvery interesting to observe the many styles and approaches people are implementing.<\/p>\n
As I\u2019m getting closer to starting the options program, I\u2019ve been thinking about what style would
\nbe suited to my personality the most. I have a little bit of an idea but I don\u2019t want to reach any
\nconclusions until I see all the possibilities for the course and discussions with you as my mentor.<\/p>\n
I know that you\u2019re very busy with all the mentoring to others traders and I don\u2019t want to take
\nup your time until my time comes as a student, but I would like to know about your specific
\napproach to trading\u2014the butterfly as a style or strategy\u2014and the thinking behind that.
\nFor example, do you see it as taking advantage of anticipated movement in the market or
\npredominantly as a change in the price of options? Or do you see it as a business in which you
\nare managing options contract inventory or as something else?<\/p>\n
I am almost done reading the book you recommended on the Natenberg\u2019s Options Volatility<\/em> You\u2019re probably wondering on when I will be ready to start the course I\u2019m hoping to be ready in Jaro from Down Under<\/p>\n —-<\/p>\n Hi Jaro,<\/p>\n It\u2019s nice to hear from you, and great job on putting in the hard work to read the options classics. In answer to your question, my butterfly trading philosophy arises from the fact that at- It\u2019s my view that if trades commence with the maximum amount of short-time premium, I don\u2019t mean to be negative about iron condors. We do teach and trade them here at SMB. And thanks for writing!<\/p>\n Seth<\/p>\n","protected":false},"excerpt":{"rendered":"
\n and Pricing<\/em>, but I still have to get to McMillan\u2019s book.<\/p>\n
\nfive to six weeks\u2019 time. To me it\u2019s like an eternity, but a good opportunity to practice patience.<\/p>\n
\nThis can only help you in the future.<\/p>\n
\nthe-money butterfly trading takes maximum advantage of the heaviest amount of time
\npremium being sold along the options chain\u2014those options nearest to the money. This is
\nimportant to me, as the kind of options trading that we teach at SMB Options involves making
\n\u201ctrade adjustments\u201d during the trade. I consider those adjustments the \u201cexpenses\u201d against
\nwhich my \u201crevenues\u201d\u2014the short time premium that I have sold\u2014are \u201cspent\u201d.<\/p>\n
\noptions traders have that much \u201cin the bank\u201d to spend on adjustments. As we go into the
\nmentoring process, you\u2019ll get a better understanding of what I mean. With other strategies such
\nas iron condors, commencing far out of the money, I have less to \u201cspend\u201d on adjustments\u2014
\nwhich in my mind is less advantageous. And if the market stays still for a little bit, the butterfly
\ngives you the best chance of meeting your income goals quickly. Finally, I like the initial delta
\ncurves of properly initiated butterflies\u2014nice and flat J.<\/p>\n
\nAnd many of the greatest options traders in the world exclusively trade iron condors. But my
\npersonality lends itself to the butterfly, for all of the reasons I mentioned. Your personality may
\nbe different. We\u2019ll discover that together in the mentoring process.<\/p>\n