The short butterfly option trading strategy is a good way to earn small profits, while keeping downside risk to a bare minimum. If you think a stock is set to experience a sizeable move, either up or down, break out your short butterfly playbook.
Related To: Put Options
When I got interested in trading credit spreads, like most I harbored some skepticism. A credit spread trade seemed to be the type that works—until rather dramatically it does not. Then I set off to figure out the correct way to trade SPY put credit spreads. The path was familiar: backtesting.
I explain what a put credit spread (bull put spread) is using an insurance analogy and real numbers, plus when to use this income-generating strategy.
A beginner’s guide to put options that uses a simple laptop analogy and real stock examples to explain how traders use puts for protection or profit.
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