Trade Structures
Posts about choosing between flies, risk reversals, condors, calendars, and other multi-leg structures.
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The fly trap
Call butterflies look incredible on paper. Spend $300, make $1,200. That's 4 to 1. Here's what the payoff diagram doesn't show you.
Two time horizons, one portfolio
Your swing trade thesis has a shelf life of about 10 minutes right now.
Why I rolled into a put fly
SPX at 6,380 and I just banked profits on my put spreads. A sharp squeeze higher is building...
The weekend gap the market forgot
Everyone's arguing about where the SPX goes next. I'm looking at something else entirely.
The fly held you hostage
Butterfly spreads look incredible on paper. 10-to-1 payoff. Defined risk. Tight structure. Here's the part that stings.
The better-looking trade is sometimes the worse trade
Remember this... the payoff diagram is a photograph of the last day. It shows you what happens if you hold to expiry, if price lands in the right spot, if everything plays out along one specific path.
Your hedge is bleeding you dry
Buying puts every month to hedge your portfolio is a guaranteed way to bleed money. Most puts expire worthless
Stop buying calls on the bounce
You see a selloff. You think it's overdone. So you buy calls. Then theta eats you alive because vol is through the roof.
Stop overpaying for protection
Your hedge is expiring. Vol just spiked. The obvious move is to roll into another put. Don't.
Why I'm using flies instead of calls right now
Most traders see SPX stretched 1-2% below VWAP and reach for calls. In 30-vol, that's a terrible trade
Right view. Wrong structure.
"I had the right view... but still lost money." Does this resonate with you?
Skew is storing energy
Everyone wants to sell premium right now. I get it — vol is elevated, theta looks fat.
The view wasn't the trade
"I had the right view but still lost money." I hear this time and time again. And the answer is always the same. The view wasn't the trade.
Options are NOT too risky
Most people who say “options are too risky” have already made a decision error. They’ve judged the instrument before defining the payoff.
A calibrated decision loop...
Most traders think the value of a trading community shows up after the trade.P&L screenshots. Victory laps. “Called it” energy.