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Strategies & Market Trends : Advanced Option Strategies -- Ignore unavailable to you. Want to Upgrade?

To: AurumRabosa who wrote (199)	9/8/1998 7:39:00 AM
From: Joe Waynick	Read Replies (1) \| Respond to of 355

Nice to meet you Ron! I haven't done butterfly spreads yet, so pardon me if I ask elementary questions. But I'm always concerned with safety. Perhaps you can educate me, and the thread, about this strategy. My question is: What's your repair if the stk moves against you?

To: AurumRabosa who wrote (199)	9/8/1998 10:18:00 PM
From: ringo99	Read Replies (3) \| Respond to of 355

Can you explain how these work. How can you make money on this butterfly. The way I figure it is the butterfly will negate the wings for a negative gain. Please tell me if I'm missing something here... ie buy 1 - 105 call @ 9.25 = 925.00- sell 2- 110 calls @ 6.75 = 1350.00+ buy 1 115 call @ 4.50 = 450.00- ================ ------- ------- NET 1375.00- 1350.00+ 25.00- ======== ======== ====== if stock ends at 125 for example, call worth 105 call = 20 x 100 = 2000+ 110 calls = 15 x 200 = 3000- 115 call = 10 x 100 = 1000+ ========================= ------ ------ 3000+ 3000- 0.00 ======== ====== ======