5 Zero-Day Butterfly Options Strategies Unpacked

Summary

Explore five distinct zero-day to expiration butterfly options strategies employed by experienced traders. One approach focuses on speed and efficiency, aiming for small, consistent profits by entering and exiting trades within minutes, with an average holding time of just 18 minutes. Another strategy involves dynamically building multiple butterfly positions throughout the day, often referred to as 'fly catching,' where the goal is to have one position land near the closing price, accepting more variance for potentially larger gains. A third, high-risk, high-reward method, dubbed the 'Trojan Horse,' seeks explosive returns of 1,000% to 5,000% by entering midday and using narrow strikes guided by indicators like VWAP and RSI divergence. Fourth, a risk-controlled strategy, the broken wing butterfly, combines credit and debit spreads to provide protection against significant market moves, allowing for flexibility to flip positions. Finally, the 'Maria shoe trade' emphasizes repeatable income, using an iron butterfly with strict entry and exit rules around 10:30 AM to capture an average of about $111 per contract per day, suitable for smaller accounts. These strategies highlight diverse philosophies from speed and positioning to precision, protection, and consistent income, all utilizing the same core butterfly structure.