Paid Daily · Resources · Ask Plutus
The Top 3 Mistakes to Avoid When Trading Put Butterflies
NowPress play to follow along0:00 / 11:15
Chapters9 segments · tap to seek
ticker lesson
Breakdown
0:00lesson
Put butterfly strategy for bearish market
- Put butterfly is target trade, not bias trade
- Market lands in zone around time
- Not typical directional bet
- Very specific targeted bet
1:58lesson
Why put butterfly is not smart strategy
- Market drops 30% in November, blows through butterfly
- Butterfly loses money if market doesn't move
- Smarter strategy: put vertical
- Put vertical with strikes close
3:40lesson
Risk management for small accounts
- Small account under $5,000
- Use dollar-wide strikes
- Risk budgeting: 25-50 bucks per trade
- Keep strikes close: 5-10 points
5:38lesson
Trading log and review process
- Review decision-making process
- Quarterly review of trades
- Identify good process vs luck
- Avoid mistakes by reviewing
7:22lesson
Segregating trading results by style and time frame
- Segregate results by style and time frame
- Learned scalping doesn't work
- Too much influence from macro factors
- Focus on working strategies
9:13lesson
Trading logs for new traders
- Use trading logs for strategies
- Check if moving averages work
- Helpful for liquidity and macro events
- Logs improve performance
10:54lesson
VIX behavior in risk-on environment
- VIX continues lower in risk-on environment
- Market not concerned about risks
- VIX at 15-16, not historically low
- Rule of 16: VIX at 32 implies 2% daily move
10:55lesson
Trading VIX with small risk
- Long call spreads in VIX options
- Sell put spreads in VIX
- Keep risk small
- Losses are small if VIX doesn't rise
10:56lesson
Trading log for opportunity identification
- Use logs to identify working opportunities
- Focus on strategies that fit your style
- Less stress with better opportunities
- Logs help in decision-making
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