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The IBM Trade Dr Jim Schultz Is Watching
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Chapters4 segments · tap to seek
ticker lesson
Breakdown
0:06lesson
Expected move butterfly around earnings
- Butterflies effective near expiration
- Less time = more extrinsic value decay
- Friday expiration week optimal
- Monday/Tuesday butterflies have lower profit potential
- Wednesday/Thursday butterflies target gap/triple moves
3:25IBM· ticker
IBM — bearish, $211 entry
- IBM at 211, setup to downside
- Expected move range 200-225
- Short strikes at 200/197.5
- Maximum loss $2.17
- Maximum profit $783 (theoretical)
5:08lesson
Butterfly risk/reward ratios
- 3.5-4.5:1 profit/loss ratio preferred
- Wider gaps increase profit potential
- Debit paid equals maximum loss
- Expiration timing critical for max profit
6:54IBM· ticker
IBM — adjusted butterfly setup
- Strikes 207/197/187
- Debit reduced to $2
- Market width challenges
- Filled at 208 entry
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