Expected Move Butterflies: Direction & Magnitude
Update: 2025-08-22
Description
On today’s From Theory to Practice, Dr. Jim starts the show by examining the Expected Move Butterfly he played in SPX, looking for a move to the upside. And interestingly, with Powell suggesting that rate cuts were coming in the near future, the market did rip significantly higher. However, with Expected Move Butterflies, not only do you have to nail the direction of the move, but you also have to nail the magnitude of that directional move. So in the end, Dr. Jim’s Butterfly ended up being about a scratch.
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