Iron Butterfly Options Strategy Explained - Full Example on $JPM

[@JakeBroe]

Give this video a LIKE to support my channel! Also check out my entire playlist on Trading Options here! kzbin.info/aero/PLscTZuOqKWIxSZzy4ObKWDznEsCot_1HU

[@pierrebrseven]

Very helpful. Now I get butterfly spreads. Best explaining video I've seen. Thank you!

[@RicoKareem]

How on bloody earth could you have known that 12 hours ago I was trying to create an Iron... "something/anything", and was failing miserably? Thank you so much for your videos. Here's to you being the Solana next to the other "Money Guys" on KZbin.

[@JakeBroe]

Haha, thanks Rico! I appreciate the support and am happy I could help clarify the concept. We'll see if I can take my channel to the next level in 2022!

[@MT-qq1rq]

Great explanation Jake for the Iron Fly. When I encounter a losing side on my put credit spread I sometimes enter an offsetting call credit spread trade to reduce or if I'm lucky to eliminate my losses and a few times I converted one of the credit vertical spreads into an Iron Candor or an Iron Fly. Good point you mention that you can close one of the spreads early to lock in profit and always close or roll the spread to avoid issue with assignment.

[@brianquigley6862]

Interesting adjustments. I never really use IBs but sometimes an IC gone bad could turn into an IB after a few adjustments. And then sometimes that newly formed IB could need adjusting. So if I understand you correctly, you would sell a CALL credit spread above the short call of the IB to take in more credit to reduce max loss, right? Is that correct? I saw a video where the youtuber recommended selling a NAKED call above the short call as an adjustment when IB was threatened to downside. I would be too nervous adding more risk and getting whipsawed. I didn't quite understand how you could end up with an IC though. I just opened an IC on PLTR -15 deltas $.50 wide. I want to get comfortable with adjusting. I'm certain PLTR will move somewhere in next 14 days so I will be sharpening my adjusting skills. Seems like you have a PhD in adjusting.

[@brettmedina24]

Great and simple walkthrough, thanks

[@TheMadMariner]

You do a really good job explaining this stuff.

[@matthewsherwin8741]

Wow! Very impressive! I’ll never know how you fully comprehend all this. Good for you! 👍

[@JakeBroe]

Thanks Matthew! Math is just fun for me. I really enjoy it!

[@vufirst]

@3:17 and later, you have a typo. The strategy on #4 is buy a put at a lower strike.. :-)

[@JakeBroe]

You are correct! There is a typo on the slide. Thanks!

[@eddyjuteau589]

Great teacher and great human being you are! Also love your work with Ukraine👊

[@wolfgangi]

Absolutely love these, great job as always Jake.

[@JakeBroe]

Thanks Wolfgang!

[@chrisvinci5417]

I've tried all these strategies and in the end what makes me the most money consistently is just selling naked puts followed by covered calls. Everything else is just too time consuming for the payoff.

[@JakeBroe]

Just sticking with the Wheel Strategy! Solid plan chris!

[@johnnyringo2670]

What do you do if you end up with shares at a lower price than you started, because if you write them, and they get called at a lower price before you recoup you can lose big. So my question is then do you try to get in at the lowest point perceivable to avoid this?

[@alanyoung159]

Great video!! You put so much effort in these videos teaching this stuff! Thanks!

[@JakeBroe]

I greatly appreciate you watching Alan! Cheers!

[@deneslukacs8600]

Hi Jake, I love your channel and trading options following your advice! I am selling covered calls with little money but plan to do more as I learn. It has been great fun! I have been following the market for a long time but every reputable channel advises to do only index funds. I like playing the game and your channel has the best content for it! Cheers!

[@aaronshrope5695]

Great video!! I was just wondering about this strategy!

[@JakeBroe]

I got you covered then Aaron! Cheers!

[@keithm4028]

Jake, I absolutely love these videos. Very easy to follow, along with the pros and cons, putting things in perspective. Would love to see a video on mitigating risk or how to maintain consistency to slightly beat the market.

[@brianquigley6862]

excellent video. Do you have a video on how to adjust an Iron Butterfly? Thanks for an excellent presentation!!!

[@dwalker6868]

OK as always you explain things so well and shaking my head yes I got it not sure if I’m gonna try it yet. Thank you

[@JakeBroe]

Still good to know how it works! Thanks for watching D!

[@abdinasirmohamud2068]

thank you very much for all the wonderful videos you’ve made

[@JakeBroe]

Thank you so much for watching Abdinasir! As long as people keep watching them, I'll keep making them!

[@Kiokenx4]

You always put great educational content. Almost everything i know from the market, especially options, is pretty much from your channel. Knowledge is power!

[@JakeBroe]

Thank you so much Alexis! Glad I can share all this important knowledge with you!

[@RatRatham]

Well done video. Easy to follow.

[@dwalker6868]

Yep over my head but sticking with it. Thank you

[@JakeBroe]

Haha, this is about as advanced as options trading gets. Not for everyone!

[@behrensf84]

so with the iron butterfly looks like it would be great right around earnings. after earnings are announced, usually the volatility goes way down, so both sides would have a cheaper price to buy back...

[@JakeBroe]

well... yes and no. Premiums around earnings are higher, but reporting on earnings is exactly when a stock is most likely to shoot up or down, which would then might cause you to lost on this trade.

[@robbybaggio4007]

Great explanation. Thank you.

[@kcsnew]

First things first, Jake I liked and subscribed your channel and been watching your videos lately, well explained , I have not tried out butterfly, which one you like Iron Condor or Butterfly ? Cheers

[@JakeBroe]

Welcome to the channel kcsnew! Great to have you with us! I personally prefer the Iron Condor since I am less likely to be assigned on the trade. The Iron Butterfly is interesting... but it just feels like the probably of having a leg lose me money is higher.

[@jeffconner8231]

It would be really helpful to see a full example. Several really. It's hard to tell when you should have sold to close early versus holding to expiration, when there are so many variables and possibilities and strategies! Oh my!

[@JakeBroe]

Haha, for sure Jeff! Many ways to play it as it would unfold over time.

[@craigchambers4183]

I'm singing In a Gadda Da Vida now!

[@JakeBroe]

Haha, cheers Craig!

[@theditto69]

In a gadda da vida, baby!!!!!

[@nnrq822]

Is there collateral for this?also if you enter it as one spread you can't leg in or out correct?

[@pandhipriyanka]

Hey Jake Nice explanation. What is the maximum risk for this strategy? In your experience, how many times it was profitable to you if you traded it 100 times?

[@toothybj]

I thought it was a band my dad used to listen to back in the 70s 😁

[@JakeBroe]

Haha, it's both!

[@austindrury856]

Hi Jake, great video as always! Maybe my brain is just fried from the start of classes, but I'm a little lost on this (and the iron condor), how exactly do you "lose money" on these strategies? Meaning, if you fall below your break even price and let it sit until expiration, does your broker simply take the cash from your account? Does that mean you have to leverage enough cash to cover that situation? Or am I just missing something obvious here?

[@Atropin4ik]

You better close the trade before the expiration on your own, taking the loss if out of the range. Because if held through expiration one of your short side will be assigned. And if that was a high price stock or you got too many butterflies, your account just wouldn`t meet margin to buy/sell 100 shares of that stock (multiple by the amount of butterflies). At this point you are taking a risk of being assigned after hours. In the best case scenario your bank would exercise long and short contracts that are in the money, so they would "annihilate" each other (still with the loss = width minus credit received). but if you would got randomly assigned after hours on your short contract, you would not be able exercise your long contract because it would be already expired. Wathc this video for the worse case scenario kzbin.info/www/bejne/qKW5d51vo7eFetE

[@BogieTokes]

hahaha what the heck you also have great trading content as well i watch you for other stuff but this is great

[@luxuryholmes1661]

Could you theoretically just make a really big profitability zone?

[@danharvey61]

Thanks

[@misaelarredondo7933]

Jake I’m trying this but it keeps just showing up as an iron condor on Robinhood. Am I doing something wrong?

[@JakeBroe]

I have no clue if you are doing it wrong, lol

[@Atropin4ik]

It doesn`t matter how it is called, mb RH just doesnt have a separate option for the iron butterfly. Iron butterfly is still a condor but witht no width between short strikes. Choose IC and manually select the same strike for both short put and call.

[@adityarookey1]

Like credit iron condor better

[@marcjaimes3266]

Good job! just remove yourself from the screen for a better view

[@vishalanandmedia]

Very well explained, thank you