Backspreads, Diagonals and Butterflies - Advanced Strategies

This course combines 3 advanced spreads - Backspreads, Diagonals (and Double diagonals), and Butterfly spreads.
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503 students enrolled
Instructed by Hari Swaminathan Business / Finance
$60
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  • Lectures 10
  • Contents Video: 2 hours
  • Skill Level Expert Level
  • Languages English
  • Includes Lifetime access
    30 day money back guarantee!
    Available on iOS and Android
    Certificate of Completion
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About This Course

Published 3/2013 English

Course Description

THIS OPTION SPREADS COURSE COVERS THREE (3) ADVANCED OPTIONS STRATEGIES - BACKSPREADS, DIAGONALS AND BUTTERFLY SPREADS

SECTION I - BACKSPREADS AND RATIO SPREADS

Back Spread and Ratio Spreads involve putting on an unbalanced amount of Long and Short Options. If we have more Long Options than Short, the position is called a Back Spread and if we have more Short Options than Long, the position is called a Ratio Spread. In a Ratio spread, you have unlimited losses on one side because you have more Short Options. The Back Spread is part of the BUSY PROFESSIONAL SERIES can be constructed in many creative ways, and we show you how you can manage different strike prices as well as different ratios of Long and Short Options to construct an optimal Back Option Spreads. We don't recommend Ratio spreads as they have an unlimited loss potential.

What you will master
  • What is the philosophy of Back spreads and Ratio spreads
  • Different creative possibilities with the Back spread
  • How should we look at the Greeks in a Back Spread
  • Importance of understanding the "Valley of death"
  • How should we avoid the valley of death
  • Why is this a Volatility strategy
  • Why do we not recommend a Ratio spread
  • Why is the back Spread a great trade for the busy professional

SECTION II - DIAGONALS AND DOUBLE DIAGONALS 

The Diagonal is a variation of the Calendar time spread, and it tends to reduce the Vega exposure of a Calendar spread. Due to this fact, it also has a Delta bias when the trade is put on. It is important that you understand and become a master at trading Calendar spreads before you try a Diagonal spread. Although the Diagonal has very similar characteristics as a Calendar spread, the Diagonal is a complex variation of the Calendar spread. Just like in Calendars, the easiest adjustment to a Diagonal spread is to convert it into a Double Diagonal on the losing side, and the course covers this adjustment in detail. You will also benefit from a higher Theta decay than in regular Calendars, however the compromise you make is that the risk exposure in higher than a Calendar, and you also have a Delta bias.

What you will master
  • What are Diagonals and how do they differ from Calendars
  • Why are they difficult to adjust
  • What are the normal adjustments for a Diagonal
  • How the double diagonal increases your profit zone and your max profit area
  • Why does Diagonals have better Theta decay than Calendars
  • Why do Diagonals reduce the impact of Vega
  • Why is there a higher risk in Diagonals than Calendars

SECTION III - BUTTERFLY SPREADS

The Butterfly is a low risk, high reward, and low probability strategy. The Butterfly involves 3 different Options including Long and Short options, so it can be a bit difficult to manage once its put on. But the Butterfly can produce great results if it works, and in many cases the cost of the Butterfly is minimal, and if you're lucky, you may even receive a credit for the Butterfly. Both these trades are generally put on by hardcore Options traders. The Butterfly trade should not be your regular "bread and butter" trade in the sense that you can't rinse and repeat this strategy all the time for consistent monthly income. But the Butterfly can be an excellent strategy in very specific circumstances - like protecting the losing side of an Iron condor or a credit spread. Another great application for the Butterfly is during an earnings report. Both of these specific applications are covered in detail in this course of Advanced Options Strategies.

What you will master
  • Why is the Butterfly a low risk, high reward strategy
  • What is the probability of the Butterfly producing fantastic results
  • How do we adjust Butterflies
  • Why the Butterfly is a speculative strategy
  • Why is the Butterfly not a "bread and butter" trade
  • What are the specific instances where a Butterfly can work
  • When does the Butterfly generate its maximum profits
  • How can use Butterfly trades as a hedge to protect our monthly income strategies

What are the requirements?

  • Options basics, Call and Puts and Vertical spreads
  • Options adjustments and Spread adjustments
  • Calendar spreads (for Diagonals)
  • Credit spreads (for Butterfly spreads)

What am I going to get from this course?

  • Learn about three advanced strategies - Backspreads, Diagonals and Butterfly spreads
  • Learn how the Backspread can be constructed in very creative ways
  • Why the Backspread can be a monthly income strategy and a Volatility strategy at the same time
  • What are the differences between a Calendar spread and a Diagonal
  • Why the Diagonal spread is considered an exotic strategy
  • Learn about the very exciting Butterfly spread
  • What are the best times to trade a Butterfly spread
  • What are the specific applications of a Butterfly spread that can make it a very powerful weapon in your arsenal, especially if you have losing trades

What is the target audience?

  • Options traders with all the basic knowledge and want to expand their knowledge of more advanced strategies

What you get with this course?

Not for you? No problem.
30 day money back guarantee.

Forever yours.
Lifetime access.

Learn on the go.
Desktop, iOS and Android.

Get rewarded.
Certificate of completion.

Curriculum

Section 1: INTRODUCTION TO BACKSPREADS AND RATIO SPREADS
08:32
The Backspread is a "Volatility" strategy and can benefit from a move in either direction. We explain the base case of the Backspread
20:20
The strength of the Backspread lies in its ability to be creative and flexible with a number of features - selection of the Long / Short ratio, selection of strike prices and moneyness of the Options, as well as expiry series. In this lecture, the Backspread is dissected in detail for all these variations.
11:27
The Ratio spread is the reverse of the Backspread. The Ratio spread has more Short Options than Long Options, and so will have an unlimited loss profile on one side. Due to this fact, the applications for a Ratio spread are limited and they have high risk for low reward.
Section 2: DIAGONALS AND DOUBLE DIAGONALS
05:32
Explanation of the base case of a Diagonal spread
22:35
How is the Diagonal similar to and different from a Calendar spread ? This lecture breaks down the Diagonal spread in detail.
09:00
Another demonstration of the Diagonal spread
Section 3: BUTTERFLY SPREAD
03:31
Introduction of the Butterfly spread and its construction
08:11
Demonstration of the Butterfly spread using the S&P 500 Index (SPX) Options
13:19
The Butterfly spread can be very effective in specific situations. We explain these situations in detail, including how to hedge other positions using the Butterfly spread
04:53
A wrap-up of all the three advanced spreads
Course Quiz
7 questions

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Instructor Biography

Hari Swaminathan, Options and Financial markets expert, Trader and Investor

Knowledge. Strategy. Execution.

Hari Swaminathan is the founder of OptionTiger, a cutting-edge Options education and trading company based in Washington D.C.. Hari is an entrepreneur, everyday person and a self-taught Options expert for over 8 years. Hari has a Bachelors degree in Engineering from India, and MBA degrees from Columbia University in NYC and London Business School in the U.K

More than ever, its become important for everyday people to take control of their financial situation, and create additional income in a smart, risk-controlled manner. This is precisely my mission. Through knowledge, education and investment discipline. Options are powerful, but they have a learning curve. I've broken down all the complexities of Options in simple language that everyone can understand. The courseware uses real trade examples, always highlighting the pluses and minuses of every investment situation. Options provide the best way to take advantage of bull cycles, bear cycles and everything in between.

As someone that has self-learnt Options and through making mistakes, I can tell you Options trading is not something you should take lightly. You will hear people talking of fantastic triple and quadruple digit returns. I'm here to be brutally honest with you - 

- Be very very careful in the first 12 months of Options trading. 

- This is when everyone is the most vulnerable to losing money. 

- Your main objective during this time is to focus on learning this craft and not lose money during this time. 

Having said that, if you can get past the first 12 months and acquire the expertise in a systematic manner, true financial independence awaits. Options are a mathematical and strategic game much like Chess, and no amount of technological advances can make this skill obsolete, because the fundamentals of Options are never going to change. 

You can trade Options from anywhere in the world, regardless of how old you are. You never have to worry about job security any more because you have a skill that can produce consistent wealth month after month. 

But you have some serious but exciting work to do before you can get there, and I'm here to help you in this journey. 

Watch my Free Course for Options Trading Beginners where I draw out a detailed roadmap of what this 12-month journey looks like, and the specific strategies you should master during each step of this learning process. 

Watch my Free Mini-courses or my YouTube channel , all of which have the highest quality of education material. 

And join me in my UDemy courses, where I share cutting-edge theoretical knowledge mixed with practical insights, strategy and impeccable execution through live trading examples. 

If you have any questions at any time, please feel free to message me on Udemy.

The order to follow on my Udemy courses

Comprehensive guide to Financial Markets, Investing and Trading

Options Trading Beginners Bundle (3-course Bundle)

Advanced Options Concepts

Options spreads and credit spreads Bundle

Technical analysis and Chart reading Bundle

After this, the order does not matter. You can take any of the courses as per your interest.

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