[TheOptionClub.com] Re: Butterfly question? on Feb expiration

 

Mary:

I was a little naive to think that I invented a new trade...hehe. I guess its the Batman trade.... but ..you are right. "Iron Kitten" is a cuter name.

Joules :)

--- In OptionClub@yahoogroups.com, Mary Norfleet <naboba1@...> wrote:
>
> Joules,
>
> "Iron Kitten" is a cute name.  The "Batman" has been traded and discussed a lot by many traders and a group called www.got-options uses it as their basic trade every month -- or at least they have in the past -- I haven't kept up with them in recent years so I'm not sure what they are doing currently. 
>
> Mary
>
>
>
> ________________________________
> From: Joules <jouless360@...>
> To: OptionClub@yahoogroups.com
> Sent: Tue, February 16, 2010 9:58:04 PM
> Subject: [TheOptionClub.com] Re: Butterfly question? on Feb expiration
>
>  
> Mary:
>
> Yes...it does look like Batman. I just thought "Iron Kitten" sounded cuter...lol. Anyway, it has potential as you have that guaranteed return set up like an iron condor with the possibility of bringing in more if it lands in the ears of the kitten. Not to mention your margin costs are a lot lower than an Iron Condor.
>
> Joules
>
> --- In OptionClub@yahoogro ups.com, Mary Norfleet <naboba1@ > wrote:
> >
> > Some people call that graph the "batman."
> >
> >
> >
> >
> > ____________ _________ _________ __
> > From: Joules <jouless360@ ...>
> > To: OptionClub@yahoogro ups.com
> > Sent: Tue, February 16, 2010 2:23:16 AM
> > Subject: [TheOptionClub. com] Re: Butterfly question? on Feb expiration
> >
> >  
> > Nick:
> >
> > Thanks....I have puts on the downside and calls on the upside. I set the trades up connecting butterflies which makes the trade look like an "iron kitten"...lol. . It is a combo of the butterflies that give the tips of the butterflies on each end(kitten ears) and a flat line across the center like a stretch condor. So basically I get about 10 % when it stays in the middle and 30 to 40% when it lands in the kitten ears. I wish I could upload a pic to make it easy to see and understand.
> >
> > Joules
> >
> > --- In OptionClub@yahoogro ups.com, Nick Horowitz <nhorowitz@ ..> wrote:
> > >
> > > If you have butterflies that are all calls or all puts, by definition, then one leg will be ITM at expiration. There is a variant called an Iron Butterfly which is puts on the downside and calls on the upside, so those don't necessarily go ITM if the price stays in between. Don't worry about being assigned; it's not a big deal. Just dispose of the long or short stock on Monday morning (TOS even lets you receive short stock in an IRA if you are assigned, so that's not even an issue); or you can go long or short the offsetting stock at the close on Friday and then everything will wash over the weekend when they post your assignment.
> > >
> > > ____________ _________ _________ __
> > > From: OptionClub@yahoogro ups.com [mailto:OptionClub@ yahoogro ups.com] On Behalf Of Joules
> > > Sent: Sunday, February 14, 2010 9:33 AM
> > > To: OptionClub@yahoogro ups.com
> > > Subject: [TheOptionClub. com] Re: Butterfly question? on Feb expiration
> > >
> > >
> > >
> > > Lance:
> > >
> > > That is why I was checking to see if I should close them. 7 of my positions in thinkorswim are showing (itm) next to them. I just thought if I was between the breakevens.. .everything would expire with no worries.
> > >
> > > Joules
> > >
> > > --- In OptionClub@yahoogro ups.com<mailto: OptionClub% 40yahoogroups. com>, "L" <Fluffernutter@ > wrote:
> > > >
> > > > Joules
> > > >
> > > > At expiration, an out-of-the-money option expires worthless. Doesn't matter if you are long or short, IF YOU'RE SURE that the option will be OTM at expiration, there's no need to close the position.
> > > >
> > > > Of course, if you see an opportunity in the days leading up to expiration to remove all your risk for a few pennies, it's something to consider.
> > > >
> > > > BTW, you also mentioned your "breakevens" . Being within your breakevens is not the same as holding positions that are OTM. Be sure you understand the difference.
> > > >
> > > > Lance
> > > > Beginner
> > > >
> > >
> >
>

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