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Reverse Harvey Adjustment For A Longer Term Broken Wing Butterfly – (Video)

Overview:

The video below makes reference to the July 29, 2016 expiration $SPX Broken Wing Butterfly.  The trade was started with 85 DTE, scaled into, and then adjusted due to an open profit.  The video below talks about a potential Reverse Harvey adjustment for the trade.  Ultimately, I opted for a less aggressive adjustment and sold a vertical spread within the body of the fly.

Order History:

The orders for this position have been made available as the trade progressed (since 5/5/2016) on the Results Page.  They’re duplicated below for easier viewing.

SPX.bwb.orderhistory

Video:

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  • Not Even Wrong

    Utilizing the rev harvey is a great idea, especially for reducing risk. What i have found though is that on the topside, it will lift your expiration line but the T+0 isn’t necessarily accurate. Reason being is that the volatility will come out and the T+0 will sink faster to the expiration line since the debit spread in your fly(top 1/2 of the butterfly) is now further from the money. Hopefully that makes sense.

    • Dan

      Interesting and it does make sense. Thanks for the comment!