Table of Contents

CHAPTER 1 – BROKEN WING BUTTERFLY SPREADS (BWB)

Section 1 – Introduction
Section 2 – Definition
Section 3 – Practical Definition of Broken Wing Butterfly
Section 4 – Ratio Spreads and the “Greeks”
Section 5 – The Practical Use and Mechanics of Ratio Spreads

CHAPTER 2 – BROKEN WING BUTTERFLY SPREADS (BWB)ENTRANCE CRITERIA

Section 1 – Step 1: Select an underlying to trade
Section 2 – Step 2: Decide if you are bullish, bearish, or neutral on the market
Section 3 – Step 3: Select the month(s)
Section 4 – Step 4: Determine with which strikes to begin
Section 5 – Step 5: Calculate the cost of a small ATM Ratio spread
Section 6 – Step 6: Calculate the cost of a medium width ATM ratio spread
Section 7 – Step 7: Calculate the cost of a large width ATM ratio spread
Section 8 – Step 8: Find the spread in the next month out 
Section 9 – Step 9: Determine the range of the underlying if it moved 5 – 6%
Section 10 – Step 10: Calculate the spread’s value after the underlying moves
Section 11 – Step 11: Compare and contrast the various price possibilities to which the spread may go
Section 12 – Step 12: Determine if the front or the back month spread is better
Section 13 – Step 13: Compare other indexes
Section 14 – Step 14: Ratio Spread versus Broken Wing Butterfly (BWB)
Section 15 – Step 15: Converting a Ratio Spread into a Broken Wing Butterfly (BWB)
Section 16 – Practical Application SPY BWB
Section 17 – BWB Case Study

CHAPTER 3 – BROKEN WING BUTTERFLY SPREADS EXIT CRITERIA

Section 1 – Step 1: Get the P/L result from the Entrance Criteria
Section 2 – Step 2: Set a Profit goal and Exit Points
Section 3 – Step 3: Consider Closing and Adjustment of Front and Back Month
Section 4 – Step 4: Monitor Market Few Time per Day 
Section 5 – Step 5: Recalculate Profit and Loss Points 
Section 6 – Step 6: Re-Evaluate Profit and Loss of the BWB trade 
Section 7 – Step 7: Monitor the new price which spread will start to lose money
Section 8 – Step 8: Decide your action if loss occurs 
Section 9 – Step 9: Decide Adjusting or Closing of the BWB 
Section 10 – Step 10: Consider Closing Trade when close to expiration 

CHAPTER 4 – BROKEN WING BUTTERFLY SPREADS ADJUSTMENT

Section 1 – Time Until Expiration as a Variable 
Section 2 – Distance From Strike 
Section 3 – Estimated Move 
Section 4 – Trends 

CHAPTER 5 – ENTERING THE BEST TRADE

Section 1 – Normal Market Conditions 
Section 2 – Abnormal Conditions 
Section 3 – Credit or Zero or Debit to Enter? 
Section 4 – Payoff Diagrams 
Section 5 – Ratio Spread vs Broken Wing Butterfly Spread 
Section 6 – 1-3-2 Trade 

CHAPTER 6 – THE BEST PRODUCTS TO TRADE

Section 1 – Indexes 
Section 2 – Exchanged Traded Funds 
Section 3 – Stocks 
Section 4 – Stock Broken Wing Butterfly Criteria 

CHAPTER 7 – EXITING TRADES

Section 1 – When to Roll 
Section 2 – What Kind of Profit to Take 
Section 3 – When to Get Ready 
Section 4 – What to Expect 
Section 5 – When They Pin It 
Section 6 – Trading the Weeklies 
Section 7 – When to Roll Over or Close Advanced Criteria 

CHAPTER 8 – BROKEN WING BUTTERFLY EXAMPLE FROM POT