A Butterfly Needs Two Things Right. Most Traders Only Plan for One.

Jim Schultz opens the books on a rough night: three earnings butterflies, three misses. The most useful one is the stock that actually did fall hard, exactly the direction his downside butterfly wanted, and the trade still finished at max loss because the move blew straight past the target zone. A butterfly is not one dimensional. You need the direction and the magnitude. That is why he anchors his strikes to the expected move, while reminding you it is a probability, not a promise. Then he goes hunting in the wreckage: with volatility still elevated a couple of days after earnings, he steps in as a short-term contrarian on a beaten-down mega cap with a defined-risk short put spread in the September cycle. He also answers an assignment question, and it all comes back to extrinsic value. This is education, not a recommendation. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 Happy Friday, into the market 00:43 Three earnings trades, three misses 02:22 The Apple trade worth learning from 03:17 Direction and magnitude both matter 03:48 Why he anchors to the expected move 05:13 Hunting for a post-earnings entry 06:16 How low an IV rank is too low 12:00 A contrarian short put spread 13:54 Assignment comes down to extrinsic value #tastylive #optionstrading #butterflyspread #jimschultz #earnings #impliedvolatility #insidethetrade #optionsstrategy #riskmanagement #optionseducation tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.