Since the risk reward is the same, what I normaly do is go to TOS analyzer tab and I put 3 of them at the same time and I choose the cheapest one sometimes there is a few pennies difference. As for the time period, I like to mix them up, for instance if put one for the front month I go with shorter wings for instance If use the SPY and I put one for July I will use 5 points spreads. Today if I buy the July 90 95 100 call butterfly my risk will be 146 and my reward 354, I have room for adjustment when one of my wings gets hits. If I'm going for longer time period say August I like to use the short Iron Butterfly with 10 points spread for Instance I will sell the AUG 95 stradle (the body) and buy the 105 85 strangle (the wings) I will get 631 credit and risk 369. if the spy goes up or down to my break even point I will adust By buying another one. for instance if the spy hits 101 before Aug expiration I will buy another Butterfly, or vertical , and roll my my 85 puts up for cheap, in case of reversal. I will roll to 88 or 90 for a little cost. In case of High volatility, butterflies become cheap and I'm able to have wider spreads for the same cost and increase my break even points. I also use the ITM butterfly for protection, For Instance I bought a few 80 delta leaps on USO a few months ago and I keep rolling them up to lock profits and buy ITM butterflies below the current price. for instance if I buy the the 33 37 41 July call butterfly for 1.10(ITM butterflies are cheap) and the stock goes down a few dollars i will make some money to cover some of the loss on these leaps but I will leave the upside profit open( unlimited). I could sell ATM or OTM calls but on oil stocks it is risky. In case of any war or turmoil in the Middle East oil stocks might jump $10 or more overnight. Labib --- On Sun, 6/14/09, Rob Hansen <robhansen5252@
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