22d • 🏆 Wins & Progress
Converting a SPY Put Ratio Into a Risk-Free Butterfly 🦋 (Again)
Hey, on Tuesday I published a new trade idea: a SPY 650/640 put ratio spread (1x2), 31 DTE, opened for a $306 credit right as volatility spiked. The objective was simple: get paid for the panic.
Today I've pulled a super-strategic move: just bought the 630 put for $1.11, and that single adjustment transformed the entire position into a risk-free butterfly 🦋 (!) with:
- Zero downside risk
- Zero upside risk
- Max profit: $1,200
- Min profit: $195
- Probability of Profit (PoP): 100%
This is what most traders miss in high-volatility regimes: you're not predicting direction; you're engineering a distribution. When fear is overpriced, you can sometimes lock structures where the market pays you first, then sells you the wing cheap enough to remove the tail.
I do this setup on SPY all the time, but the framework works on any liquid ticker with tight markets: QQQ, IWM, and even selected single names.
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Converting a SPY Put Ratio Into a Risk-Free Butterfly 🦋 (Again)
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