SPY Crashes Deployment

 

When 10%  Deploy 10%  , 15% drops Deploy 22% , 20% drops Deploy 30% 

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Active Wealth Accelerator

 A Client-First Culture | BNY Mellon Wealth Management

https://www.bnymellonwealth.com/index.jsp

Very good articles .. 

Butterflies , Condors and Iron Spreads

 Butterfly means 3 strikes with either calls or puts (1:2 and 2:3)  

Condor means 4 strikes either calls or puts (1:2 and 3:4)  

Iron  means both puts and calls with 3 or 4 strikes --  

( Type A 1:2 call and 2:3 put Iron Butterfly

  Type B 1:2 call and 3:4 put Iron Condor

)

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Long call Butterfly

composition - 2 call vertical spreads

a. bull call spread (debit)

b. bear call spread (credit) 

Buy 1 X 60.00 call at 4.10

Sell 2 X 65.00 calls at 2.00

Buy 1 X 70.00 call at 0.85

Total 0.95 net debit

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Iron Butterfly. 

compostion - 2 ways to look at it 

. bull put spread (credit) + bear call spread (credit)

. short straddle (credit) + long strangle (debit)

Buy 1 X 60.00 put at 0.60

Sell 1 X 70.00 put at 3.80

Sell 1 X 70.00 call at 4.10

Buy 1 X 80.00 call at 1.05

Total 6.25 net credit.

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Long call Condor.

Composition - 2 call vertical spreads

a. bull call spread (debit)

b. bear call spread (credit) 

Buy 1 X 75.00 call at -9.00

Sell 1 X 80.00 call at 5.90

Sell 1 X 85.00 call at 3.60

Buy 1 X 90.00 call at -2.00

Total -1.50 net debit.

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Iron Condors 

. bull put spread (credit) + bear call spread (credit)

. short strangle (credit) + long wider strangle (debit)

Buy 1 X 60.00 put at 1.30

Sell 1 X 65.00 put at 3.10

Sell 1 X 70.00 call at 2.30

Buy 1 X 75.00 call at 1.10

Total 3.00 net credit.

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Butterfly Options and Condor Options Trading Strategies Explained - YouTube

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Greeks

 

                                        

                                            

Curriculum: All About Options (cmegroup.com)

Long Call Scenarios (cmegroup.com)

5 market scenarios.

 There are 5 market scenarios.

1) Extremely Bearish 2) Slightly Bearish 3) Sideways 4) Slightly Bullish 5) Extremely Bullish Income generation strategies (selling cash secured puts, selling covered calls, selling poor man's covered calls (buy LEAPS and selling covered calls), butterflys, broken wing butterflys, diagonals etc work in scenario #2, #3 and #4. There were a few comments on how people got burnt by selling covered calls. That's because year 2020 was scenario #5. An anomaly. Also because income generation strategies are not supposed to be on speculative stocks. There is a time for each strategy and there is a strategy for each ticker. Scenario #1 and Scenario #5 call for altogether different strategies. The more well rounded a trader is, the more normalized the annual returns are. Else a perma-bull will make money continuously for 4 years and lose in 1 year. A Perma-Bear will lose money continuously for 4 years and make all of that and more in 1 year. My advice? Spend quality time in learning and mastering at least couple of strategies and you will be able to manage your own portfolio. That will take at least 3 to 5 years minimum, though. The power of F.I.R.E. is not just teaching strategies. The power of FIRE is COLLABORATION. If we can establish that within the community, it serves even economic, social & political purposes. That's the true goal of F.I.R.E.

200 Moving Average - Rules-based methodologies.

The Index uses an objective, rules-based methodology to implement a systematic trend-following strategy that directs exposure 

(i) 100% to the S&P 500®

(ii) 50% to the S&P 500 and 50% to 3-Month US Treasury bills, or 

(iii) 100% to 3-Month US Treasury bills, depending on the relative performance of the S&P 500 and its 200 business day historical simple moving average (the “200-day moving average”). 

Equity Indicator. When the S&P 500 closes above its 200-day moving average for five consecutive business days (the “Equity Indicator”), the exposure of the Index will be 100% to the S&P 500, effective at the close of business on the first business day following the date of the Equity Indicator. The Index will be in a new position effective on the second business day.

Once the Equity Indicator has been triggered, the exposure of the Index will next change to either be 50% to the S&P 500 and 50% to 3-Month US Treasury bills if the 50/50 Indicator (described below) is triggered or 100% to 3-Month US  Treasury bills if both the 50/50 Indicator and the T-Bill Indicator (described below) are triggered simultaneously, effective  at the close of business on the first business day following the date of the indicator(s). The Index will be in a new position  effective on the second business day.

50/50 Indicator. When the S&P 500 closes below its 200-day moving average for five consecutive business days (the “50/50 Indicator”), the exposure of the Index will be 50% to the S&P 500 and 50% to 3-Month US Treasury bills, effective at the close of business on the first business day following the date of the 50/50 Indicator. The Index will be in a new position effective on the second business day. Following the effectiveness of the 50/50 Indicator, the exposure of the Index may be greater than or less than 50% with respect to the S&P 500 and 3-Month US Treasury bills depending on their respective performance until either the Equity Indicator or T-Bill Indicator (described below) is triggered. Once the 50/50 Indicator has been triggered, the exposure of the Index will next change to either be 100% to the S&P 500 if the Equity Indicator is triggered or 100% to 3-Month US Treasury bills if the T-Bill Indicator (described below) is triggered, effective at the close of business on the first business day following the date of the indicator. The Index will be in a new position effective on the second business day.

T-Bill Indicator. When the S&P 500’s 200-day moving average closes lower than its value from five business days earlier (the “T-Bill Indicator”) and the 50/50 Indicator has been triggered, the exposure of the Index will be 100% to 3-Month US Treasury bills, effective at the close of business on the first business day following the date of the T-Bill Indicator. The Index will be in a new position effective on the second business day.

For example, if today is Wednesday and the S&P 500’s 200-day moving average closes lower than it did on the fifth preceding business day (Wednesday of the preceding week), the T-Bill Indicator is triggered. Unlike the operation of the Equity Indicator and 50/50 Indicator, the closing values on the days in between today and the fifth preceding business day do not affect whether the T-Bill Indicator has been triggered; rather, the T-Bill Indicator simply compares today’s closing value to the closing value five business days earlier. However, the Index will not move directly from 100% exposure to the S&P 500 to 100% exposure to 3-Month US Treasury bills unless the 50/50 Indicator was simultaneously triggered following the most recent triggering of the Equity Indicator.

Once the T-Bill Indicator has been triggered, the exposure of the Index will next change to be 100% to the S&P 500 if the Equity Indicator is triggered, effective at the close of business on the first business day following the date of the indicator. The Index will be in a new position effective on the second business day. Once the T-Bill Indicator has been triggered, the Index will not return to its 50/50 position unless the Equity Indicator is first triggered, followed by the 50/50 Indicator being triggered.