Does anyone do Iron Butterflies overnight on the indices?

#1

I’m doing this in demo. I try to buy for 75-80 & sell for 20-25. If you can get the strikes on the edges (one of the top two & bottom two) you can usually take profit around 95/5 BEFORE the market opens at 9:30am!!! I usually can’t get strikes on the edges though. I did last week on my first attempt to demo this strategy, but so far this week the prices are pretty bad on the strikes that I want.

Another problem I can see when looking at the chart on Ninjatrader is sometimes the market (US TECH 100) moves 30+ pips in a half an hour in the middle of the night. This is on very little volume. That worries me, because I want to eventually be trading 10+ contracts per side. If it goes too far overnight, I’m not sure if I’d want to take the loss on the losing side (giving me a loss overall)… or just let it ride & hope it turns around after 9:30. Does anyone else trade iron butterflies overnight on the indices? Any advice? There has to be a way to trade the indices overnight & make consistent profits.

#2

My advice is to not do Iron Butterflies but do iron condors on spreads. They are less risky because they are not all or nothing. As long as u use the stop trigger you won’t have to worry about losing all your initial risk and you can make more on them than binaries. So watch the Iron condor videos and practice them in demo to get a feel for how they work

#3

My problem with iron condors is they cost too much. I want to eventually do 10+ contracts on both sides. It’s going to take a while for me to be able to afford that on binaries, but the iron condors on spreads are usually in the hundreds for just one contract… and I’ve had no luck with them in the past. I’ll be watching my iron butterflies, and I can get out of one side before expiration if I have to (taking a smaller loss). I’m taking strikes on the daily indices on both extremes. I think on most days I’ll be able to take profit on both sides before the 9:30 opening bell. Those outer strikes are usually in the money at 95/5 before the New York open.

#4

Last night I made well over $200 in demo doing my iron butterfly strategy. 2½ hours ago, I entered my butterfly with horrible prices. I bought 10 @ 87 & sold 10 @ 7.75. This is just a test in demo, so I’m not afraid of the bad prices. I have my take profits set at 95 & 3.75. If both profit targets are hit, my net profit after commissions will be $84 (120 - 36 for commissions). When I first entered the trade, I was down around $140 overall. Just 2½ hours later, I’m only down $57.50! My strike prices were both mid to upper 30’s away from the underlying, and we’re talking middle of the night in the USA. As long as some freaky thing doesn’t happen where the market spikes up or down & doesn’t come back, I should be able to get out on both sides.

The only thing I don’t know yet is what the outer strike prices are when they open at 6pm. I’m at work at that time & have no access to Nadex. I’m about to get a smart phone with data & I’ll be able to put in working orders much earlier on those outer strikes. Hopefully I can get them for a better price, like maybe 82/28. I’d be happy with prices in that range, and setting T.P. orders at 95/5. :slight_smile:

#5

15 minutes later & I’m down just $55. :smiley:

#6

Down $52.50. Notice how the lower strike is moving towards 95, while the upper strike is also moving towards $3.75. I’m gaining on both sides. I really want to see the market move far on one of these demo trades to see how far off the actual p/l gets.

#7

Profit target was hit at 9:20am on the long. The other one still has 22 points to go before it hits my strike. The market is up quite a bit since last night. Here’s where I hope it turns around & goes back down at 9:30. I think the “Earnings Release” that came out yesterday after 4pm is really affecting it. There are more of those every day for a while.

#8

Now the idiotic minds of people are pushing the market through the stratosphere because of some silly earnings report yesterday at 4:05pm. At least I know I wouldn’t have taken this trade on my live account. The price was really bad, and I knew about the earnings report. They are going to continue through this week & next week. I actually could’ve taken some profit right after 9:30 when it moved down a little. Most of the time I want to be completely out before 9:30 & just let the people do whatever the heck they want with the stupid market. I’ll get this.

I don’t want to do OTMs anymore, because the market never moves far enough to compensate for how far out my entries are. The market makers also like to make it tough on us by raising the prices on IV. I’m not playing this cat & mouse game with them. You can’t win doing that. I want to collect premium when the market is slow & get out.