Daily Discussion Thread - April 24, 2019

above what 1% seems to be when it gets safe from forced close.

Butterfly would be like buying the 372.5 and selling a second 370. to make it +372.5/-2x 370/+367.5

If you could do this butterfly for 88 cents you would technically be in the hole -20 cents instead of up 68. But it protects your down side risk and is potentially profitable if $BA falls tomorrow. you can pull it off in the morning either way. This type of trade is mostly about overnight risk and gamma risk at this point. analyst upgrades or downgrades that happen overnight. The IV has been crushed. I am not suggesting do this butterfly or anything. Looks like you made a good trade actually. Just giving a butterfly example. Another example would be buying a second 387.5 and selling a 390 for 5 cents. You still have risk on a spike up in this butterfly example, but you gain some gamma for only 5 cents.

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