 Welcome to my course on advanced butterflies. My name is Hari Swaminathan. I run a company called optiontiger.com. I've been an options trader for about 8 to 10 years, but I also have extensive experience with all the other asset classes like stocks, ETFs, bonds, including options and futures. I have a Baxler's degree in engineering from India and an MBA from Columbia Business School in New York City. A little bit about myself. This is my Udemy channel. You can find me under udemy.com slash user slash Hari Swaminathan close to about 30,000 students from 168 countries and an average review of 4.47 out of five and this is as of May 31st 2017. I also want to show my youtube channel got about 650 videos. Please do subscribe if you want to be notified whenever I add a new video. My website and you'll see a whole bunch of advanced proprietary intellectual property systems and these are methods and approaches that I've created over time with the best practices to get the edge from the market maker side to our side. So without any further delay, let's get started with the butterfly course. The butterfly is an advanced spread in general. It's a four-legged spread. It can be viewed in many different terms. If you've seen a butterfly, it's generally you'll see like a pyramid structure pointy structure going up into the reward zone and it'll meet at one point. Now it is also a specific type of iron condor. It is also can be viewed as a combination of spreads. It's a combination of a debit spread and a credit spread and the butterfly's main characteristic is that it is a low risk and very high reward. So this is one of the strategies where you can see a risk to reward of about one is to six sometimes one is to eight sometimes. So it's really a very attractive reward picture. However, to get that reward, it's a very low probability. So it's a low risk, very high reward and low probability strategy. It can be put biased to one side. So if you were thinking that a stock or the index is going to go up or down, you can structure the butterfly to the call side or to the put side in case you were bearish. And you can also use all the options. There are three, it's a four-legged structure, but it uses generally the base case at least uses three options. There's one middle option and we'll be showing all of this of course inside. And you can use either call side only or you can use put side. Now time decay is the central income mechanism. So basically at the end of the day it's an income strategy, but the only problem is it happens late in the cycle. So if you put a butterfly a couple of months ahead of expiry, it's unlikely that you're going to see the position move on a day-to-day basis. There are various applications of the butterfly. Now you can use butterflies for hedging a credit spread. So which means if you have a credit spread that expires in two weeks or three weeks or four weeks, you can use butterflies in the front series and hedge your iron condor or your credit spread if you feel that one of them is getting at risk and I'll be demonstrating that. But the real power behind the butterfly is when you start getting creative with them. So when we say creative, we are going to move away from the base structure. The base structure is the vanilla structure, which is the low risk, very high reward but very low probability. So what we're going to do is to modify this base case to make it a bit more attractive and a bit more flexible and most important we want to increase the probability of the success of this butterfly. So that's what we mean by getting creative and there are various ways to do it and we'll be discussing that as well. So let's look at the course agenda. So first of all you have to understand what the common base case vanilla butterfly is and so we'll discuss the we look at it in on the platform and we'll see that the butterfly can be a high reward strategy. However, it's got very low probability and so that's the that's where the need arises to become a little creative with it. But once we start discussing the creative variations of the butterfly you'll see that these butterflies can be very powerful and so we're going to look at some broken wing butterflies. There are various names for these things. We'll look at unbalanced butterflies, uneven butterflies. There are some butterflies that can give you, you know, on particular sides of the butterfly. You can get a guaranteed return. Also we're going to look at a live trade on price line which has one of those characteristics. Then we're going to look at adjustments to that price line butterfly trade to make our reward profile even better. And then of course you want to exit at the appropriate time and in this particular case there is a very key lesson learned and why we have to also watch out for various things that can impact the markets. Yeah and so finally we'll have a conclusion and a bonus lecture. But first I want to give a discussion of the common or the base case or the common vanilla butterfly. Once we do that, then we can discuss the creative variations and then place the live trade as well. Thank you.