On October 29 with SPX at $2087, I bought an slightly bearish put butterfly in the November 13 expiration, about 2 weeks from expiration. I bought 20   November  2065 puts, -40  November  2055 puts and bought 20 November  2045 puts for a total debit of .52 1/2 . The total cost of the trade was $1050 ( 20 butterflies times .52 1/2). I did the butterfly 20-40-20, 1 butterfly would be 1-2-1. SPX Price The price of SPX didn’t cooperate with my desires the first week of the trade and went up near the $2114 area and not down in price which I would have preferred. On November 4, the trade was down around 50% or $500. Why didn’t I take it off and call it a day. I was originally looking for around 50% profit and was willing to lose 50%. The key reason I stayed in on November 4 with 9 days remaining is because I still had 9 days left and knew I would only need 1 down day to lessen the losses quite a bit. Once I get less than 1 week left on these directional Butterflies, I start to cut my losses because I’m running out of time. On […]