Butterfly 🦋 I Passed 9k 👋 I Christmas Not Over🧑🎄
I hope you are having a great final week of the year. First off, I’d like to invite you to a special training TONIGHT at 8pm EST with Jason in the Roadmap Room (ALL are welcome) → join HERE @8pm! He’s cooking again in SAJ!
And..I just opened a new bet against the market (which I rarely do), and I wanted to share with you how I set it up and why I made the trade.
What I set up is called a “Butterfly Trade” using put options on QQQ – and I have been getting a lot of member questions about it in Alpha Hunter. It is a pretty unique trade, and it has the possibility of making a huge return (if it works out), while also limiting losses if I’m wrong.
I’ve been pondering this trade while at my home in NH. It is nice to be back for this time of year to see old friends and have all the kids together.
The weather is miserable though. Clouds and cold rain all week so far. I must say, I like the weather better in VA so far.
I had a nice dinner a couple of days ago. (thanks to member Michael W for sending me the steaks this week! 🥩)
💪 Michael W! Michael W! Michael W! 💪
One thing I truly miss about NH: Cooking steaks on my open fire pit + Stoneface IPAs 🍻(the best in the world!).
I have not been trading a lot this week, but I’ve made a few moves, if you have been watching those app alerts.
So, back to that butterfly trade 🦋. At a high level, it is structured like this:
QQQ Jan 26 put butterfly: + $410 put (1 long) & -$400 put (2 short) & +$390 put (1 long) for $1.57.
It is a combination of 3 different put positions (reminder: a put is a bet against a stock) where I go LONG 2 contracts at different strike prices, and then SELL 2 contracts in the middle of the two that I bought.
This creates a unique ability to make an incredible gain if things work in my favor.
I took this screenshot of the profit / loss profile from Tastyworks on my phone when I set it up. This is a good visual of what needs to happen for me to make money on it…
What I ideally want to see happen is for QQQ to trade down to $400.
That is the level where I see the max profit, which is just over 440% max potential.
In reality, I would be out of this trade with somewhere around a 200% profit, though, if it happens.
My risk on the trade is $1.57/contract, which is the amount it cost me to set this up. I will likely close this out for a loss around 50%, if that happens in the next couple of weeks.
Overall, it is a good type of trade when you want to make a leveraged bet that something is going to go lower, but you don’t think it is going to collapse.
In this trade, I will end up giving back all of my profits if QQQ falls below $390, so ideally, I need a small pullback, but not too much. It is a delicate balance, and I am being rewarded for taking that risk if it works out.
The other trade I was considering was to buy a put spread. Maybe buy the $410 put and sell the $400 for a few weeks out. That would produce a possible 150% profit if QQQ makes the move lower than I think it will.
The good thing about that trade is that QQQ could collapse, and I would have my profit capped – but not give it back like the possibility of the butterfly.
Of course, I could be totally wrong, and the market will just keep floating up higher each day. I have a small amount of risk to the downside if that happens. It is a good risk/reward type of trade to me.
As you’re looking into butterfly trades, realize that most people set this type of trade up to the LONG side. It is a great type of trade to set up when you think a stock is going to make a move in one direction, but not a massive move.
I hope you found this lesson useful. I intend to make many more trades like this in 2024.
There is no better way to learn how to make unique trades like this than by being a member of my Alpha Hunter program.
This is my top service where I teach members exactly how I make high-probability option selling trades.
I think my trades performed very well in 2023. I started Alpha Hunter 6 months ago, with an optimistic goal of hitting $10,000 a month in profits – all while using smaller trade sizes (my average trade size was around $3500).
I am proud to say that even with one of the most difficult trading environments I have seen in a long time, I was able to easily surpass that goal.
And… I am looking to lock in over $120,000 in profits in 2024!
Although I cannot guarantee results or that my members will be able to replicate mine, I CAN guarantee that I will teach members about the trades I make and show them exactly when I am getting into my trades and when I exit them.
You will not find a better service to help you learn how to make new types of option trades as well as learn why a 20-year trading veteran makes the moves that he does.
Alpha Hunter will set you on the right course for your trading in 2024.
Do not miss out on the BLOWOUT PRICING that is happening right now.
To YOUR success and a great new year!
Jeff Bishop
Tired of Hallmark Christmas movies? I got you…
Operation January Commencing!
Are you ready to CHARGE???
Join Jeff and his army on their next $10,000/month mission!
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