Case Study: BYND
A ton of emails I’ve gotten this week have surrounded two very important questions.
For today, I’m going to walk you through my recent trade in BYND to provide the answer to those questions, and some additional analysis (and an awesome graphic).
Here are the questions…
Question:
What size account do you need to trade butterflies? I have a (insert account size here) – is this something I can do?
To answer your question, these trades work great for any size accounts, especially small accounts. It just depends on the type of fly you want to do — you just have to choose your own adventure.
Question:
I’ve taken butterfly classes in the past, so I’m not sure how this would add to my trading.
This class is about three types of directional butterflies. This means that you have a price target in mind, on a ticker that’s moving! This isn’t a slow and steady, income type of butterfly where you’re just looking for around 20% or so.
Let me illustrate my points with my trades this week on BYND.
BYND – 195 Minute Chart
I saw this beautiful directional setup, so I wanted to trade it with a combo of:
- The Easy Target Fly
- The Triple Stack
- The Lotto Trade
What does it mean?
I have three different butterfly methods that I’ll utilize when I have a directional setup. They look like this:
Easy Target Flies are meant to ‘hit the easy target.’ They’re also relatively cheap, making them great for those looking to get ‘easy hits’ and grow small accounts. Imagine you’re playing baseball. In this example, I paid $1.85 per contract, and sold for $4.23 per contract in three days. This is a gain of $283 per contract on $185. Can you make a trade with $185? The Easy Targets may be for you. Of course, a grand slam’s amazing, but you can still win hitting singles and doubles on a regular basis.
The Prime Time/Triple Stack Flies are the ones that have a higher target, and require a bit more investment — but, with more investment, comes more potential for profit. These are great for regular swing traders that love to trade directional setups and want to maximize your profit potential. In the BYND Triple Stack example, I bought for $6.00 and sold for $14.84. That is a gain of $884 per contract, on a spend of $600. It’s more actual money, per contract, but of course the risk’s larger. But then, there are those that know how to hit the regular doubles and triples with the occasional homerun. It’s the same amount of work swinging the bat, but the reward’s greater when you get it right!
The Lotto Flies are somewhat ‘for fun.’ Of course, they’re placed with skill and intention, however due to their very cheap nature, you can use them when you want to maximize your percentage gains. I don’t use lottos a lot, because they hit less often than the other two, but it’s great to know how to use them, for when the time’s right. This trade cost $0.47 (that’s $47). One of the smallest trades I’ve done. However, I came out with $290 per contract. I could’ve lost my $0.47, since it’s a lotto — but, with the Stacked Profits method, it was still a high probability shot. The grand slam’s great, and the crowd will cheer and you’ll celebrate, but that’s because it’s inherently more rare. It wouldn’t be special if it happened every play! You still need the skills to try, if you’ll ever hope for it.
What does this ‘Choose Your Own Adventure’ look like for me?
If somebody asked me, what’s the best way to use this strategy? This is exactly what I’m teaching tomorrow! This is how I stack ‘em up!
Why this setup? With this setup — there was just so much confluence:
- Daily Squeeze
- Run into Earnings
- High Short Interest (44%!)
- Hot IPO with lots of hype
- Run Away Gap Last Earnings Quarter
I had to use the Stacked Profits Method. However, there are many other times to use this method… and I’m going to show you them, tomorrow!
P.S. There may even be a few bonuses left for my “7 Stocks to Success” class. It’s basically a ‘two for one’.
Hi Danielle,
My name is Alma, I am currently in a membership with TG’s Moxie way but I have a small $500 account and have to take really small profits. I am interested in learning option strategies and was wondering if you were going to offer the $7 trial membership. I hope you will. See you at your class tomorrow.
Alma