This forum is for students of the Bearish Butterfly trading strategy to share information.

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• #15424 John Locke
Keymaster
@john-locke     Let’s say the reference point is 1000, the RUT moves to 1035, and causes the delta theta ratio to be greater than 1.5/1.

So I roll up the 950/1000/1050 20 points to 970/1020/1070  and my reference point is still 1000 right?

That would be correct. The only time the reference point would change would be in the event of a roll back.

The next day the RUT moves up to 1045 and here is my question: Do I now add the 2nd 3rd  which would be another 970/1020/1070 since that I am 40 points over the reference point?

Yes, you would add the second third but the second third is always added 20 point higher than the 1st third so if you have 1 butterfly that you rolled to 970/1020/1070, with a reference at 1000, then the second third would be added with the asset over 1040 and it would be 990/1040/1090

• #15421

Let’s say the reference point is 1000, the RUT moves to 1035, and causes the delta theta ratio to be greater than 1.5/1.

So I roll up the 950/1000/1050 20 points to 970/1020/1070  and my reference point is still 1000 right?

The next day the RUT moves up to 1045 and here is my question: Do I now add the 2nd 3rd  which would be another 970/1020/1070 since that I am 40 points over the reference point?

Thanks!