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8/15/19: Portfolio Analysis - Butterflies Are Hard!

From Theory To Practice

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In today’s portfolio analysis, we have an outstanding example of why it’s so difficult to achieve high levels of profitability with a standard Butterfly. Here, we have our CMG position that is nearly at the perfect price, with only 1 DTE, and it is still only showing a modest profit. To combat this, we normally manage our Butterflies very aggressively, at around 20% of max profit, but this is still very important to recognize for something such as a Free Butterfly.

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