Short Butterfly Dec 2015 - Performance Report Week 42/2015

Last week, EuroStoxx 50 closed above 3,260 points. Volatility keeps on going down. Currently, I am still facing some losses due to high expenses for insurance in September and October. For my next trading period, I will try to keep those expenses low. I figured out that options valuation is more stable with expireation some months out. That means it could make sense to reduce protection in the beginning and buy better insurance a month or two later.

The maximum profit is at the moment around 3,700 EUR. Focussing on my profit target of 50 % of that we still have a long way to go. The position is at risk if the EuroStoxx 50 moves above 3,400 points or below 2,800 points. To me that feels like a pretty comfortable profit zone right now.

The question is, what do I do if me move further up. Chart show bearish resistance between 3,300 and 3,400 points. If we move closer to 3,350 points I would feel extend my position at 3,250 and 3,450 points. At the same the short call option at 2,950 have to be closed if possible. Or will will buy one FESX future to cover the position.

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