Upward adjustments for Butterfly trades

Discussion in 'General Discussion' started by Murphy Tan, May 1, 2018.

  1. Murphy Tan

    Murphy Tan Well-Known Member

    Hi all, I would like to ask for some advice on this. I understand that RoadTrip uses call spreads (popularly known as reverse harvey) and Rhino calendar spreads for upside adjustments. Does anyone use kite spreads or back ratio spreads to add deltas for upside adjustment. What is your experience with these 2 forms of upside adjustments? Under what circumstances would you choose to use them? Thanks!:)

    Regards
    Murphy
     
  2. Jason A

    Jason A Member

    Murphy Tan likes this.
  3. status1

    status1 Well-Known Member

    I just wanted to clarify a few terms unless you are really trading this way
    Typically the road trip is done with puts but I suppose it can be done with calls as well
    While technically you are doing a put spread you are not adding a spread to the trade you just move the existing upper long to make the Reverse Harvey adjustment
     
  4. Murphy Tan

    Murphy Tan Well-Known Member

    Hi all, thanks for the kind advice! @status1, I'm sorry not to clarify that I usually trade Iron Butterflies. It might have confused you but you are right.

    I'm trying to explore the possibility of using Kite or Ratio spreads as an adjustment compared to using Reverse Harveys. Thanks anyway!

    Regards
    Murphy
     
  5. status1

    status1 Well-Known Member

    No problem
    I have not tried it but it's hard to say how it would work out without knowing exactly where the strikes are placed
    I would imagine if the market would go up quickly you could take advantage of the extra long otherwise if the market stays the same or goes lower the extra long will start to hurt the trade and have to readjust
     

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