optionscholar.com

Martinghoul

Senior member
2,690 276
When they talk about their returns, what exactly are they referring to? If they're not including the capital that needs to be posted as margin in their calculations, I would be a little concerned. In general, I would take all their claims w/ a healthy pinch of salt.
 

frank1212

Junior member
14 0
They get returns by dividing the net credit received by the debit they got the spread for. They also take into account trading fees which many services don't. I spoke to founder when I signed up
 

A Dashing Blade

Experienced member
1,373 170
Yawn . . . new poster recommending new product that no-one's ever heard of . . . viral marketing is so last century mate.
 

Martinghoul

Senior member
2,690 276
They get returns by dividing the net credit received by the debit they got the spread for. They also take into account trading fees which many services don't. I spoke to founder when I signed up
Right, so not taking margins into account... A little misleading, perhaps?
 

frank1212

Junior member
14 0
I am a passionate trader/investor that wanted to share something I thought was worth while. I do not see how a blog post would be an attempt at viral marketing mate. I do however believe in the old fashioned time proven strategy called word of mouth. There is also no margin required to trade reverse iron butterflies just need the net debit for the spread.
 

Martinghoul

Senior member
2,690 276
I am a passionate trader/investor that wanted to share something I thought was worth while. I do not see how a blog post would be an attempt at viral marketing mate. I do however believe in the old fashioned time proven strategy called word of mouth. There is also no margin required to trade reverse iron butterflies just need the net debit for the spread.
Really? Are you sure about that? Especially for the trades held overnight...
 

frank1212

Junior member
14 0
Yes I am sure about that...Perhaps you should do your homework. A reverse iron butterfly is a debit spread hence you are buying the spread. The only capital you need to open the position is the cost of buying the spread. The most you can lose is the premium you paid for the spread. The length you hold the spread does not have anything to do with margin or buying power. In this case if you held the spread till expiration and it landed on your longs you would just lose the net debit paid for the spread. This is no different than buying a put or call...it either expires with value or it expires worthless in other words your maximum loss is defined. Maybe you have this strategy confused with credit spreads in which case you would need margin. Unfortunately an account does not have to be a margin account to take on risk. oh and you can sign up at optioscholar.com
 

Martinghoul

Senior member
2,690 276
I am well aware of what an iron fly is, thank you...

According to the various sources that I have seen (e.g. the CBOE Margin Manual and the various FINRA notices; all of which you can find easily on the web), an iron butterfly is NOT defined as a strategy for margin purposes, unlike a regular butterfly. This implies that, for margin calculations, your short iron fly position will not be treated in the optimistic way you've described above, but rather as a combination of call spread/put spread or a butterfly/box spread. If this has changed and brokers are not charging anything over the premium paid, that's great news.

As to the length of the holding period, it might matter, depending on the specific broker arrangements.
 

Mike boschert

Junior member
13 0
Interesting guys. I put my margin in a Segregated Tbill . Iron butterflies are considered a credit spread. You can never recieve a margin call trading a proper iron butterfly. Margins can only change if the margin requirements are raised by the exchange.
 

frank1212

Junior member
14 0
That would be correct if we were trading short iron butterflies...this is were much confusion arrises. We are not short this iron butterfly we are long hence it is a debit spread. Basically it is a bull call spread and a bear put spread. If you want to break it down that way then what does the CBOE margin manual tell you? You only need to have enough cash in your account to buy the spread. Why would you need margin if you are just buying a spread where the maximum loss is what you paid for it?
-deposit and maintain cash or cash equivalents equal to the amount by which the long put (short call) aggregate exercise price is below the short put (long call) aggregate exercise price. Long side must be paid for in full. Proceeds from short option sale may be applied.
 

jeffre4

Experienced member
1,161 157
if your just a punter who turned 7000 into 70000 why are you so keen to promote it if we are all so stupid to miss such a great opportunity then more fool us by next year you will be up to 700000
 

Jon Lubow

Newbie
1 0
Jon Lubow

Mike,
I have deep liquidity in the Iron butterflies. You spoke to Bill Last week. I am here to discuss.
Jon
 
 
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