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With SPX near key support levels a bearish butterfly looks like an interesting speculative idea. The fly, being short, can increase the speed at which it can work for us if we are correct on the downward direction of SPX. I plan to take it off when I am  up or down 50% on p/l based on the trade cost.

With SPX trading around 2425:

Buy 2 Aug 25 exp. 2420 puts
Sell 4 Aug 25 exp. 2400 puts
Buy 2 Aug 25 exp. 2380 puts

Debit around 2.60

Max risk is the debit of the trade

Mark Fenton

mark@sheridanmentoring.com

options trading courses

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