Today the next step of the Butterfly Strategy has been triggered. EuroStoxx 50 closed yesterday below 3,450 points giving the signal to sell the first leg of the 3,350 straddle. In hindsight it looks like the market is going to move more up than down after the last days of correction. But so be it, nobody knows the future.
In fact, I added another 2,248 EUR to the premiums earned. The total premium income is now 5,205 EUR. The new break even points are at 3,029 points and 3,710 points.
The next step of the strategy will be to sell the put option at 3,350 points and the call option 3,150 if the EuroStoxx 50 closes near 3,350 points. In case the EuroStoxx 50 moves up to 3,650 the next put option will be sold at 3,750 points.
The insurance at 3,100 points will expire in 3 weeks. Until then we have strong market crash protection. New put options will be bought in the third week of July.