Iron butterfly for high IV stocks

[semsem24 5]

I was thinking about the iron butterfly trade that  @cuegis  mentioned before . I think his criteria are high IV stock that drops and the IV remains elevated . I am opening this topic for all of us to contribute with stocks that we see match this criteria. Those stocks need to be range bound for the most part . Also I would love to hear critique of this trade as well as ideas to manage the trade if it goes wrong . Early this morning I was able to open GOOG 950-945-955 Aug 18 iron butterfly for a credit of 4.72 ..so this is a good risk reward given that I was able to get most of the credit in this trade with risking only 0.28 to gain 5.00 . having said that I don't plan on trying to get 5.00 and I would like to close somewhere in the top 3.00 range if the market give me that .

One of the questions I have is trade management , what do you guys do if the market goes the wrong way and let us say GOOG rallies hard or drops hard in the next few days ..My biggest trade management approach is position size , along with that , I wonder what do you do

 

[semsem24 5]

just an FYI , I back tested this one after I opened a small position , this is not the best trade ..I back tested GOOG iron butterfly for me to get the credit i want GOOG need to be very close to 950.00 on the last week prior to option expiration , even in the last few days prior to this option expiration ..so I am having some doubt on this one but I think we have a good idea that need some tweaking

[bam1960 53]

3 minutes ago, semsem24 said:

I was thinking about the iron butterfly trade that  @cuegis  mentioned before . I think his criteria are high IV stock that drops and the IV remains elevated . I am opening this topic for all of us to contribute with stocks that we see match this criteria. Those stocks need to be range bound for the most part . Also I would love to hear critique of this trade as well as ideas to manage the trade if it goes wrong . Early this morning I was able to open GOOG 950-945-955 Aug 18 iron butterfly for a credit of 4.72 ..so this is a good risk reward given that I was able to get most of the credit in this trade with risking only 0.28 to gain 5.00 . having said that I don't plan on trying to get 5.00 and I would like to close somewhere in the top 3.00 range if the market give me that .

One of the questions I have is trade management , what do you guys do if the market goes the wrong way and let us say GOOG rallies hard or drops hard in the next few days ..My biggest trade management approach is position size , along with that , I wonder what do you do

 

there are several ways to manage these trades: (1 Roll 1 short in the direction of the move when your deltas get out of hand(2.you can sell half position and open another fly giving you a double fly(3. you can roll longs up or down to manage deltas. The secret is to manage deltas. The only thing I might change would be to widen my longs out to allow yourself more room but allow more adjustments as well if it goes against you.