Monica
💫 Summary
The video discusses a trading strategy called the Batman trade which has a 50-50 win rate but can be profitable due to its asymmetric nature. The strategy involves placing two butterflies side by side and allows for flexibility in both bullish and bearish directions. The speaker also explores other variations of the strategy and explains how it can lead to medium-sized wins and small losses.
✨ Highlights📊 Transcript
The speaker introduces a new trading strategy called the Batman trade, which has both bullish and bearish positions and has been profitable in the past.
00:00
The Batman trade consists of two butterflies side by side, resembling the ears of Batman.
It has a 50-50 win rate but is profitable due to its asymmetric nature.
Some people struggle with the 50-50 win rate and the potential for losing streaks.
The speaker discusses the strategy of using a short strangle for 0-DTE trading.
05:13
A short strangle involves a short put and a short call with undefined risk on either side.
The strategy requires the spread to be wide enough to ensure sufficient profit and avoid hitting the undefined risk.
There are issues with using an iron condor for 0-DTE trading, as it requires a wide spread and has defined risk.
The Batman strategy allows for a neutral trade with the potential for big profits.
10:26
The profit curve starts small and gradually grows.
There is a lot of time to make decisions during the day.
With the Batman strategy, there are huge chances for big profits compared to the iron condor strategy.
The speaker explains the problems with doing a broken wing butterfly strategy and highlights the benefits of the Batman strategy.
15:41
The risk in the broken wing butterfly strategy is easy to manage.
The profit curve in the broken wing butterfly strategy always falls away from you.
The Batman strategy allows for earlier growth and has no risk.
The speaker is unsure about Juan's question regarding automatic profits and volatility.
The speaker discusses the PDT hack and a new strategy for options trading.
20:54
The PDT hack is a method to close one option and lock in profits.
The new strategy has a profit curve that starts low, grows, and then drops down.
The strategy provides protection in the middle for most of the day.
The speaker mentions an edge case where price is not making much progress.
In a trending market, different fly options can be used to adjust risk and maximize profits.
26:13
The SPX, XSP, and e-mini s p are three different sizes with varying margin requirements.
A larger fly can be used in a trending market going north, while a smaller fly can be used elsewhere.
Profits can be taken at different points, and losses can be minimized by hedging.
The new Batman strategy is expected to have a higher win rate, smaller losses, and narrower volatility compared to the previous strategy.
31:22
The new strategy is expected to have a win rate north of 75%.
It will have smaller drawdowns and narrower volatility.
The expectation is to have more medium-sized wins and big wins.
Overall, the new strategy is expected to be more enjoyable and profitable for traders.
Combining two strategies will result in a flat profit line and lock in profits.
36:39
The combination of two strategies will create a flat profit line.
This new strategy will lock in profits.
The speaker apologizes for not showing the visual representation of the strategy.
00:00going to rewind a little bit I know
00:03it's tough without the visual
00:06but we have
00:08a new trade coming our way and you know
00:12in the same manner that I did the the
00:15final hour trade I did a hundred trades
00:17online
00:18we're going to do the same thing with
00:20the the new Batman trade
00:23and the Batman trade uh it's just so
00:26we're clear is this guy down at the
00:30bottom it is it looks like the ears of
00:32the Batman
00:33because it's two butterflies side by
00:36side
00:38and we put them on so that uh they're
00:42both bullish and bearish
00:44and cover Us in both directions our
00:47classic trade we just pick a Direction
00:49that's the one that you see up top
00:52and it has some wonderful
00:53characteristics to it and one is that
00:55even though it's only a 50 50
00:58trade
01:00um the because of the asymmetric nature
01:03of it we are very profitable I mean it
01:06well at least for in my case
01:09um anywhere from five to seven percent
01:11uh per month and that's this year during
01:13a bear market last year during a bull
01:15market it was more like 11 to 20 percent
01:18per month
01:19so that has some wonderful
01:21characteristics to it the things that
01:24some people have a hard time dealing
01:26with is the fact that it is only a 50 50
01:29win rate
01:30and the problem with the 50 50 win rate
01:33is that you can go through streaks
01:36winning streaks losing streaks
01:38uh the winning streaks are not a problem
01:40losing streaks can be a problem
01:42so in the last year I've had at least
01:45three instances
01:47where we've had losing streaks of five
01:51days and one instance where I had losing
01:53streaks of losing streak of seven days
01:56now for most people that are coming into
01:58a strategy that is
02:01just not
02:02it's very difficult for them to handle
02:04especially because they just don't have
02:06the ability to look at the long term
02:09and if you're coming in with a
02:12with a trial right you're coming with a
02:15trial and I give four weeks for the
02:17trial so it can account for that but
02:19even so you can go through these periods
02:22where everything is going sideways and
02:24then you can have the you know this and
02:26so most people they look at that and
02:28they go what the hell is this this set
02:30this strategy sucks I said no it really
02:32doesn't suck I mean we're making six
02:33percent per month and it's it's really
02:35quite good yeah but you're losing all
02:38the time
02:39right and that's their perspective
02:41because they're only seeing a small
02:43portion of it
02:45so uh hard to convince people otherwise
02:47unless they've been with it and I can't
02:49do trials for you know for months so
02:52that you can see the efficacy
02:55so I decided that okay we have to give
02:58up something to get something
03:03and uh so what we give up is a little
03:06bit of risk so we double up on the risk
03:09but we increase the probability of
03:13profit dramatically
03:15and uh
03:17so we go from 50 to probably somewhere
03:19and I I don't know exactly what the
03:21number is going to be yet and that's
03:22going to be part of this experiment but
03:24I believe it will be
03:26north of 75 percent
03:29what we don't give up is the asymmetry
03:31and and that's key
03:35now we're essentially putting on what is
03:37uh called a poor man strangle
03:41now of course a strangle and I'll just
03:43draw it over here in the middle
03:47um
03:50let's say that this is your your risk
03:52graph
03:54a strangle looks like
03:59oh man
04:02I always do that
04:05I didn't get the color right for some
04:07reason it defaults down to the dark area
04:09I don't know why it does that
04:11the strangle is a um
04:15a
04:18foreign
04:20put and a long call
04:22all right so obviously this is your long
04:25call and this is your long put
04:28now there's a fair amount of risk here
04:33and the The Profit curve on something
04:35like this
04:38when you first open it will look like
04:40this
04:42all right and as the day goes on let's
04:46say you put this on as a as a day trade
04:48that profit curve is continually moving
04:51down like this until it fills up the
04:53strangle
04:54now what you're hoping for in a strangle
04:57is that you you move either this way or
04:59that way
05:03and that's that's uh kind of interesting
05:04so you're you're hoping for a big move
05:06but what happens with no move well then
05:09uh you know you're you're in no man's
05:12land
05:13No Man's Land anywhere from here to here
05:20so you need a movement if you don't get
05:22a movement and you only have the end of
05:25the day and that doesn't really help you
05:26on a zero DTE now you could go with a
05:29short strangle
05:32all right so a short strangle
05:36is probably a little bit closer to what
05:38we're talking about
05:45so a short strangle will also has now
05:50this has a short uh put in a short call
05:54and it looks
05:57like this
06:01almost like a condor but it has
06:03undefined risk on either side
06:06you are here and you are here
06:13and
06:15it's piano looks something like
06:19this at the start when and that's really
06:23designed for you to be at the money when
06:26you put this on much like a an iron
06:28condor
06:29of course Nyan Condor has uh legs and uh
06:33defines your risk
06:35that's what an iron Condor does but this
06:37you know obviously there's problems with
06:38this undefined risk really sucks
06:42and one of the problems with the iron
06:44Condor is that you really have to spread
06:46make the spread really wide in order to
06:49get your probability
06:51of profit
06:53up around I don't know 80 to 90 percent
06:57uh so that all you retail Traders feel
07:00comfortable
07:02and there's lots of issues with this
07:05first of all you have the undefined risk
07:06you have great premium
07:09action
07:10but still we only have
07:12we're only in the market for what uh six
07:16and a half hours
07:19right so for in six and a half hours we
07:21have to make sure that this is wide
07:23enough and we have enough profit here
07:26right there
07:27that uh
07:29that we're not afraid that we're going
07:32to get too far out this way or too far
07:34out this way
07:35and uh hit that undefined risk
07:39and it and even with a
07:41now when you put on an iron Condor if
07:44you want to Define that risk this is
07:46what happens
07:48and this is the problem with iron
07:50condors
07:52when you're doing zero DTE big problem
07:55so
08:01so here I'll do the two right here
08:06so in order to fix the problem of
08:09undefined risk you have to put on legs
08:12now and if you want to have them wide
08:14enough then what happens is that you
08:17have something that looks like this
08:20very very tiny
08:22potential profit with
08:25pretty big risk
08:27but it's wide enough that you got your
08:29you know your 90 percent
08:32pop
08:36that's um
08:39now here's the other problem
08:44that you've got this
08:47uh gamma risk
08:50on either side
08:54as this grows
08:57and and quite frankly you're just hoping
09:00that you don't go this way or that way
09:02that much
09:04and even if you do and you stay in
09:06between here uh you start losing money
09:09and if you get start getting close to uh
09:13these legs
09:14becomes untenable and that's this is the
09:17problem that most people have with
09:20with the other zero DTE strategies they
09:23they look at this and
09:25oh well uh they usually put on stops
09:29like here and here
09:31so that they can protect against the uh
09:34you know the risk now it's not undefined
09:36risk but it's still big
09:39so how do you solve all of this
09:42right well the way we solve it our first
09:45way to solve it was just to put on a
09:51simple out of the money butterfly
09:54right
09:56and uh sure when we're not we don't
09:58we're directional uh and we only win 50
10:01of the time
10:03however our return is fantastic
10:07because our risk is super small and
10:10because we can make profit outside of
10:13the tent you know as this grows
10:17we have all the space here where we can
10:19make profit
10:21and most of our profits are made out
10:22here and some of them are made in here
10:26uh but it's still it's a 50 percent
10:29pop
10:32which a lot of people don't you know
10:33they they don't like that
10:37so
10:39this is what we did
10:45we went to the Batman and
10:49a Batman
10:54and now we can act like
10:58and at the money trade
11:00or a a neutral trade
11:09and we put on
11:14trade like this
11:17and then our profit curve at the start
11:23it looks like
11:26this
11:28and then as it grows
11:31it starts looking like this
11:35right and this continues to grow up
11:40and then this lifts for a while and then
11:44it starts going down
11:47right so it's finally like this
11:54now that's really cool and that creates
11:56a very interesting Dynamic during the
11:58day
12:00and the the interesting Dynamic is that
12:03you have a lot of time if price is
12:05spending its time going back and forth
12:07here to make a decision
12:10uh and uh and and really not be worried
12:13that much because you can control if you
12:17feel like you're not it's not going to
12:19go
12:19you know towards the profit tent of this
12:21guy or towards the prophet tent of this
12:23guy you can get out with either a small
12:26prophet
12:31or a very small
12:34loss
12:37in between here
12:39right
12:41and uh you know if you're you know
12:44you're the big fan of the
12:49iron condor
12:52you're you're already that's what you're
12:54going for a small small profit
12:57all right you never get a chance at a
12:59big profit
13:01however with ours
13:04you get huge chances at Big profits
13:08so if it does come anywhere close
13:13you know between here and here
13:17you know trying to equate that to the
13:19iron Condor up here
13:21maybe I'll make the iron Condor a little
13:23darker so you can see it's the iron
13:25Contour is up here
13:29the iron Condor is profit is always
13:31small
13:33uh and there's big risk
13:37so it only has this much profit to look
13:39forward to
13:41all right
13:42throughout that entire range
13:48for us small profit only happens in a
13:50very narrow range right here
13:53and then the rest of it is Big profit
13:58see the difference
14:00you get in the picture
14:05so
14:06as the day progresses and hey look most
14:09days
14:11you have movement unless unless you're
14:14just moving you know no movement for a
14:16long time which I suppose can happen
14:20all right so we got a
14:23I think we have some questions here
14:30our bullish side is going to pin bro
14:34I don't think so I don't think it is
14:37we'll talk about today's uh trade in
14:39just a little bit
14:42uh so avoid Realms wants to know
14:45um 20 wide each
14:47uh yeah we've been experimenting with 20
14:50wide 20 wide is seems to be our
14:54our sweet spot for the width of a fly
14:56and anywhere from a one to six to one to
15:00eight risk to reward
15:03it's a Gloria is asking um I want to ask
15:06something if I do this strategy with two
15:08broken wing butterflies yeah I don't
15:10like that and I'll and I'll show you why
15:12in a second
15:16yeah whether it's reverse or whatever I
15:18I don't like it
15:20um and and I'll show you why because it
15:23starts to get you the same kind of uh
15:28profit curve shape that you get with the
15:31iron condor I mean it's not too bad but
15:35you don't you have to stay in the trade
15:37a lot longer in order to benefit from it
15:41and let me show you what Gloria is
15:43talking about
15:50so Gloria's saying hey well what about
15:57if I do a broken wing butterfly
16:00two broken wing butterflies
16:03and maybe they look like this
16:11all right
16:13so then I have hardly any risk here now
16:15see the problem there are two problems
16:17with this Gloria one is that this risk
16:20here that we have otherwise that's down
16:23down here
16:24it's not a problem to manage it's an
16:27easy problem to manage
16:29and in most cases we actually for time
16:32being have profit here now uh in the
16:35case here
16:37your profit curve is going to look like
16:39this
16:41starts here
16:43and um
16:45and you see this drop off here
16:49it's always it's always falling away
16:50from you
16:51so when you move even into
16:56the
16:57um the butterfly and as this grows
17:01it's always it's falling away from you
17:03right where if these legs are up here
17:07right it's grow it's growing
17:12it takes
17:13um you don't get the benefit of this
17:15strategy until much later in the day uh
17:18with the way we're doing it
17:20that you get the benefit of this growth
17:22in here much earlier in the day
17:26and you never really have any risk here
17:28anyway so it's not a it's not a big deal
17:34all right so we have some other
17:36questions Juan says in in each one I
17:40have automatic profits from the cost of
17:42the operations plus profit of at least
17:4430 percent this is uh let's see
17:48and the probability that one of them
17:50will close is high I open the purchase
17:53strikes according to the volatility in
17:54the options chain do you think that this
17:56is
17:57it's okay am I missing another portion
17:59of this
18:08uh I'm not sure let's see
18:11I have to put all this in context one
18:14in each one I have automatic profits
18:16from the cost of the operations plus the
18:19profit of at least yeah I'm not sure
18:21exactly what you're talking about there
18:22so it's hard for me to you know make a
18:25judgment on what you're asking
18:32[Music]
18:33um
18:34all right so now Gloria is saying well
18:36what about the other way where we take
18:38on huge risk in in between and
18:41um
18:43all right so now now she's asking the
18:45other
18:46the reverse let's let's make these
18:49backwards
18:51that might actually not be a bad idea
18:54uh
19:00foreign
19:04to all these different types of
19:06strategies
19:09all of them are better than so what
19:11she's talking about now
19:13is something like this
19:19right
19:21now
19:22this
19:25so you you come on here
19:28and uh you'll start out
19:33with a very flat
19:36profit curve
19:39and uh during the day
19:42what will happen is that this won't go
19:44up at all it will start going down
19:47almost immediately so this will start
19:50doing something like this
19:54right and then a little later in the day
19:58it'll go like that so if you're spending
20:02any time at all in here
20:06in the mid part of the day see yours
20:08this strategy what you're talking about
20:09Gloria would be a good thing to put on
20:12if you're expecting a very high
20:16expected move
20:20right
20:22so this would be good for a high
20:23expected move where you're looking to
20:25vacate this area
20:27yeah you want to vacate that area
20:29because it's it's bad this is bad uh we
20:32can eat a night nice bright red
20:35this is bad here
20:37you want to vacate that area
20:39so um so that strategy would be good for
20:42a high expected move
20:43but for
20:45just about anything else a medium or a
20:47low expected move you want to protect
20:49yourself because there's good good
20:51chance that you're going to be in this
20:53area
20:54for a good portion of the day
21:01all right Ray is saying uh short Wings
21:03on
21:05outside but cannot do PDT hack with
21:08broken wings yeah that would be a
21:11problem
21:13what what Ray's talking about the PDT
21:15hack is something that we've come up
21:18with that helps out small we can close
21:21one of these and lock in profits
21:24hmm we'd have to think about that
21:28but I you know I still like Gloria's
21:30approach if we have a high expected move
21:34all right so let's go back to what we're
21:37talking about now there's all of these
21:40are are options and there's many other
21:42things that we can consider too
21:49foreign
21:54so here's our main new strategy
22:06and then our profit curve
22:09will um
22:12start like that
22:14and then as it grows it'll actually
22:17um
22:18grow up like this across and then as it
22:22uh
22:24then it'll be like this
22:26and then finally like this and then it
22:29will uh you know that's the way it goes
22:33all right so the cool part is that
22:35you're protected here in the middle for
22:37a good portion of the day
22:40there is some point where this starts
22:42dropping down
22:43and that's that case is an edge case
22:46that's one of the edge cases I was going
22:48to talk about where price is going back
22:49and forth and not making much uh Headway
22:52one way or the other and we actually had
22:55a day like that
22:56on Monday
23:01all right so Dan Smith is saying the PDD
23:03hack works on any spread combination or
23:06combination of spreads so it shouldn't
23:08matter if it's a broken wing or not
23:12all right
23:14yeah that makes sense because you can do
23:15it on any spread right so why not do it
23:18on a broken wing so it should work fine
23:21all right so this is our preferred way
23:23because this gives us the the greatest
23:25Dynamic and it will also increase our
23:29probability of profit probably to about
23:31somewhere to 75 to 80 percent
23:36foreign
23:40our risk is very small easily manageable
23:44in this area
23:45and then we all we have to worry about
23:48is how we take profits uh when we're
23:51here
23:53all right
24:00all right let's see Juan says I open
24:03both operations symmetrically I sell
24:06each one at the current value plus or
24:08minus the expected volatility with a
24:10minimum amplitude of 20 percent of that
24:12volatility
24:15you're using all these big words
24:19I don't know what you mean by minimum
24:21amplitude or
24:23or Opera you know both operations are
24:27you saying those are both flies is that
24:30what you're talking about I don't know
24:31what that means
24:35and
24:36um
24:38and how do you sell it at the current
24:40plus or minus expected volatility
24:44yeah
24:46I would have to really you know see this
24:48strategy because I'm not sure exactly
24:50what you're talking about there but that
24:51that's okay
24:55you put on automatic profit on both the
24:57cost of operations plus thirty percent
24:59Plus
25:01which is the profit yeah I don't like
25:03this um this sort of uh systematic
25:05approach at all
25:07uh any kind of systematic approach I am
25:09not a fan of it's not going to work
25:11uh in my view I mean you might have a A
25:14system that works in all different
25:16markets maybe but uh I've never seen it
25:19and uh try to move away from it
25:23yeah I know it's hard to explain
25:25uh that's okay we we can talk about it
25:28offline too I'd like to understand
25:30exactly what you're talking about
25:34all right so Gloria says
25:36um
25:37thanks but I was think broken and other
25:40in the middle
25:42hanas or other bananas
25:45I don't know what you're thinking there
25:46Gloria
25:53all right
25:56so uh here's some other
25:59things that we can consider
26:11we can even put a little directionality
26:13into this too so if if we're in a
26:15trending Market
26:18um with
26:19the availability of the SPX and the XSP
26:23which is one tenth the XPS and also the
26:27e-mini s p
26:29which are basically three different
26:30sizes or all three have different margin
26:33requirements where SPX is the biggest
26:36the e-mini is in between and the XSP is
26:40the smallest and of course you could
26:42also go the micro es2 but its liquidity
26:45is super small at the moment
26:49um we we could if we were in a trending
26:50Market we could put on a larger fly or a
26:53wider fly or a different uh asset type
26:56outside
26:58so let's say that we have a trending
27:01Market that's going north right
27:03we could put on a big fly here
27:07and a small fly here like that
27:11right and adjust it for our risk so
27:14that's uh that's another idea
27:17so let's uh let's take a look at the
27:19markets
27:23and uh see what we had going on here so
27:27these are the two flags that we put on
27:28today
27:29we've we profited earlier uh when it
27:32went up here all right and if um there
27:36are two different things that we could
27:37do when when it got up here we I
27:40personally took this and uh hedged it so
27:42that it locked in a very tiny loss like
27:45five dollars
27:47uh and um
27:49and then took the profit from this up
27:51here and then it vacated the premises if
27:54you were still in this fly you could
27:56have profited up here and down here
27:59or if you just decided to hold on to it
28:01until the end
28:03you could have profited up here so there
28:06are multiple but you know this was one
28:08of those crazy days I doubt that you
28:09ever would have held on all the way to
28:11the end
28:12uh you know for ours but because we're
28:16not we don't have a lot of risk here in
28:18the middle
28:19uh you can
28:21wait it out until and see what happens
28:24so this is uh not not a problem for us
28:27in this strategy we could have taken
28:29small profits
28:31and at worst taking small losses if we
28:34held on to it
28:36so uh that's uh that's one case now most
28:40of the cases when you have some movement
28:43you're going to end up
28:45near the end of the day without all of
28:47this
28:48garbage going on in the middle here it's
28:50either going to trend
28:52or a semi-trend up or down and you're
28:55going to end up in one of these profit
28:57tents either
28:58in this guy or in this guy right
29:05um but yeah when we
29:07this morning we uh I took profits here
29:10and that's what I called in the room to
29:12take profits
29:14and uh and also to lock in the loss here
29:18so it was a minor profit I think that if
29:21you had the SPX on you probably would
29:22have made maybe 150 bucks per car per
29:25position
29:27uh so that's what I expect to see I
29:30expect to see
29:31um you know small
29:33profits and small losses while price hit
29:37you know stays in between these two if
29:41it gets into one of these guys then then
29:45you start seeing outsized profits
29:48now this is going to change our return
29:52distribution dramatic I think
29:54dramatically in a good way
29:57for one we're going to have a higher
29:59probability of or higher win rate
30:03and I think we'll also have a higher
30:07resulting or return overall
30:11but that's why we're doing the
30:13experiment and why we're going to you
30:16know go forward and see what this turns
30:18out to over the long term
30:21and
30:22here's here's the difference in the um
30:26the returns
30:28yeah let's see I have to go over here
30:31and put on this
30:33I know you just you just love to see the
30:37the iPad
30:40so the big difference in returns we
30:43currently have what you call a skewed
30:44right return distribution
30:47so what that means is if if this is a uh
30:52an you know a bell curve and you have
30:54even Distribution on on the minus and
30:56the plus side right
31:01um our distribution is quite a bit
31:03different
31:04we have a skewed right distribution
31:06which means that we have
31:08uh
31:09a bunch of small losses a bunch of small
31:12wins and then we have a right tail like
31:14this
31:15so
31:17um this is really where we make our
31:18money here
31:20and this is the plus side this is the
31:22minus side and we're capped you know
31:25maybe at two hundred dollars uh but this
31:28goes you know a thousand or more
31:33right this new way
31:35is going to flatten this out a bit
31:40um I think at the low end we'll be at
31:42300 we'll be able to manage at worst you
31:45know 300 but uh it's going it's not the
31:47kurtosis or the height here is going to
31:51be lower
31:53yeah
31:54but it's gonna but here it's gonna be
31:57thicker
31:59it's going to be thicker than this
32:02and it may not go up as high it may go
32:04up to 800 right
32:07uh but we're going to get us still going
32:10to get a very small number of losses
32:14a um
32:17this may this might go up a little bit
32:20but we'll say we get a medium number of
32:22wins but we're going to get many more
32:25medium-sized wins and big wins
32:29bws
32:35so that's going to be the difference in
32:37terms of what our expectations are
32:40and where this is say a 50 win rate this
32:46is probably going to be north of a 75
32:48wind rate
32:51with um with very small losses small
32:54wins and so it's going to be
32:58we probably still have a sort of a stair
33:00stepper Equity curve you know our Equity
33:04curve is probably gonna you know look
33:06like this
33:09right but the drawdowns are going to be
33:11smaller and um
33:16the volatility you know the amount of up
33:19and down that we do here is going to
33:20probably be narrower too
33:22so uh those are the uh those are what we
33:26are expecting from the Batman trade
33:29uh overall I think it's going to be a
33:31more enjoyable trading experience for
33:33people especially if they're they're
33:34just not into a 50 win rate
33:38and it's I think it's going to be more
33:40profitable too at least that's what I've
33:42seen in my you know the the first few
33:46trades that I've done
33:48and um
33:50and also the uh the simulations that
33:52I've gone through
33:53and also looking at the experience I
33:56already have with
33:58this uh this type of strategy
34:01all right so there you go
34:04hopefully that uh
34:07that tells you where we're going
34:11uh let's see
34:17[Music]
34:21so how do you hedge that again we hedge
34:23that with our pattern day trader hack
34:27so when I say hedge I mean that we lock
34:31in the profits by putting in the
34:33opposite
34:35trade
34:37so if you have a put call
34:39a long put call you put in a short
34:43um
34:44uh I'm sorry if you have a a long put
34:48fly you put in a short call fly with the
34:52same strikes
34:55uh-oh we got a question here let me see
34:58if I got that right a PDT hack locks in
35:01profit as long as you are in the profit
35:03tent or if you have any profit you don't
35:05have to be in the profit tent you can be
35:06anywhere
35:07regardless of being on the right side of
35:10volatility or not that's correct
35:12so wherever so let's say that you're
35:15you're sitting here and um
35:19Let's uh let's do this in a different
35:21way I'm going to show you this one more
35:23time
35:25one more time we go to the the iPad
35:27and I'll show you what happens with the
35:29PDT hack
35:31all right
35:35so we have a fly
35:38or any spread it doesn't matter
35:43and then let's say that our profit curve
35:47is looking like this
35:48and we can be anywhere in this profit
35:51curve but let's say that we're right
35:53here and we want to lock in that profit
35:56we're right there that's where we're at
35:58we're right there
36:01and let's say that this is a put fly a
36:04long put fly
36:07to and it has these strikes as this
36:10strike this strike and this strike
36:13to lock in that profit what we do
36:16is that we take
36:20a long call fly
36:22I'm sorry a short call fly that will
36:26um will basically look like
36:28this
36:37right
36:39and uh
36:40it's profit Curve will um will be
36:43somewhat you know different it's going
36:45to be the opposite of this but when you
36:47put these two together
36:48what's going to happen is you're going
36:51to end up with
36:54I'm going to make it green
36:58a flat line
37:01the combination of these two will give
37:03you a flat line
37:04and it will lock in profits right there
37:11that make sense
37:13that that will be your new
37:16strategy with uh six strikes up there
37:19and it will Define that and you'll have
37:22this will be a profit
37:24that you locked in
37:26when it was right here on your pro on
37:28your profit curve
37:34all right does that make sense you got
37:37that
37:51oh was I showing that
37:59I can't believe I wasn't showing that
38:04so
38:06um the cyan is your original
38:09that is the uh that is the short call
38:13fly that you put on top of the long put
38:17fly
38:19and then this is the resulting
38:22profit line
38:23let's say profit is right there
38:28yeah
38:31man I wasn't showing that I've just
38:34totally screwed this uh this whole live
38:36stream up
38:40that's all right we'll be talking about
38:41this many times more but what I want to
38:44wish everybody is a Happy Thanksgiving I
38:48hope you have a great time and for uh
38:50people that aren't in the United States
38:51and if you are from the United States
38:53and outside the country Happy
38:54Thanksgiving
38:56uh and uh if you're not from the United
38:58States I hope you have a happy Thursday
39:02so um
39:04anyways our
39:06if you had held on to
39:09our strategy right to the end
39:11uh you would have ended up with
39:15almost flat
39:20so that's kind of interesting
39:23but you know it's been like that this
39:25past
39:26oh man it's been almost two weeks we've
39:29been going just purely sideways
39:33foreign
39:36hopefully that this has been you know as
39:39much as you were able to follow through
39:40and with uh my ineptitude and pushing
39:45the right buttons
39:47and the failure of my black magic
39:50um
39:51video switcher which is unusual because
39:53these things are really work horses
39:56but we'll be back
39:58we'll be back tomorrow uh until one
40:01o'clock maybe we'll do an early show and
40:03I'll go over this again so that we can
40:05really lock this down but we're going to
40:07be doing this now for the next hundred
40:09days or so 100 trading days and we'll be
40:12talking about this intensely
40:14and show you how you can make good money
40:19with very little risk
40:21and
40:23um
40:25just a minimal amount of management I
40:28mean it I'm not saying that this is easy
40:29I'm saying that the you know you still
40:31need to be able to be practiced and
40:33Adept at putting on these taking them
40:36off being able to manage those profits
40:39but I think overall you'll find that
40:43this this strategy and the process that
40:46we go through
40:47uh will be quite enjoyable
40:49all right thank you very much
40:52peace to you all
40:55and I hope you have a great Thanksgiving
40:57and or happy Thursday and take care
41:01thank you all for showing up and asking
41:03the questions really appreciate it
41:07music
41:07[Music]
41:24foreign
41:26[Music]
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FAQs about This YouTube Video

1. What is the Batman trade strategy?

The Batman trade strategy is a trading strategy with a 50-50 win rate but can be profitable due to its asymmetric nature. It involves placing two butterflies side by side and allows for flexibility in both bullish and bearish directions.

2. How does the Batman trade strategy work?

The Batman trade strategy works by placing two butterflies side by side, giving flexibility in both bullish and bearish directions. This allows for medium-sized wins and small losses, making it profitable despite the 50-50 win rate.

3. What are the variations of the Batman trade strategy?

The variations of the Batman trade strategy explore different approaches to the placement and execution of the two butterflies. These variations can lead to adjustments in risk management and profit potential.

4. Why is the Batman trade strategy considered profitable?

The Batman trade strategy is considered profitable due to its asymmetric nature, allowing for medium-sized wins and small losses. Even with a 50-50 win rate, the flexibility in both bullish and bearish directions contributes to its profitability.

5. What are the advantages of the Batman trade strategy?

The advantages of the Batman trade strategy include its flexibility for both bullish and bearish directions, medium-sized wins, and the potential for profitability despite the 50-50 win rate. It also allows for exploration of variations to enhance risk management and profit potential.

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