I was on the phone over  the last couple of days with two of our  active  Options Tribe  members–Nagaraj Ramakrishna, who has developed an outstanding butterfly trade in the  $RUT index and Charlie Ferguson–a remarkable weekly credit spread trader. They are each active members of our Options Tribe community, having both presented their trades recently on  tribe  meetings over the last few months.

Charlie presented his weekly short call vertical spread strategy earlier in August and Nagaraj watched with great interest wondering, whether his monthly RUT butterfly strategy might not be just as effective  utilizing weekly options.

In turn,  later in August, Nagaraj presented his monthly butterfly strategy on the $RUT. Charlie was actively chatting in the webinar  attendee chat that day, and you could see him  thinking out loud about the application of his weekly options  concepts to Nagaraj’s tightly controlled monthly butterfly trade.  He commented in the chat that Nagaraj’s use of a  debit spread to control  risk so early in  the trade was “brilliant”.

Later that day I chatted with Charlie and he excitedly told me that he had already spent time that day testing Nagaraj’s approach on weekly RUT butterflies and that it looked very promising. He was planning to spend more time honing and refining his approach to butterflies using weeklies.

Meanwhile,  Nagaraj was working in parallel with Charlie,  having taken an interest in applying his monthly butterfly trade to SPX weekly options.

One afternoon, chatting with Nagaraj, I suggested that he and Charlie should be talking to each other–that they have so much to  offer by sharing their expertise  I suggested that   they could develop a superior weekly butterfly trade together,  rather than separately  in a vacuum.

Sure enough, Nagaraj and Charlie are now in a dialogue on this issue and there is an excellent information exchange going on between the two of them to develop a superior weekly butterfly trade.

This kind of exchange is exactly what I was hoping for when we founded the Options Tribe in May.  Great traders sharing ideas and the entire community gets the benefit.  I’m hoping that one of these days–and yes I”m putting both of them on the spot right here on the SMB blog–Charlie and Nagaraj will come on to a tribe meeting together and present their findings…..

Seth Freudberg

Director, SMB Options Training Program

The SMB Options Training Program is a program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg: [email protected].