 What's up navigation traders in this video? I want to show you how to set up a butterfly spread on the tasty works platform So we're looking at a chart of SPX the S&P 500 So if you wanted to set up a butterfly spread in SPX, you would simply go to the trade tab all the different Option chains are shown and then we want to choose the option chain with 30 to 60 days to expiration And we want to stay in the monthlies. So that would be right here 35 days to expiration Simply click the drop-down. It opens up all the different strikes to choose from Now when we put on a butterfly, you can do it as all calls or you can do it as all puts We tend to do our butterflies with all calls our back-tested studies Show that they perform just a little bit better But there's not a whole lot of difference if you do all puts or all calls So with the butterfly spread remember, we're going to sell The at-the-money strikes and then we're going to buy the wings above and below The at-the-money strikes you're going to sell twice as many as you do the wings So I'll show you what I mean and we can do this manually by just choosing the at-the-money strikes Which in this case is 2750 and we can simply click on the bid to sell that Now you see that's highlighted with red and it shows s1 over here But we don't want just one contract. We want to do two so you can simply Click on the quantity button down here and now you see that that moves to s2 We're selling two contracts at that strike You can also see it down below in your order sell to open minus two mean we're selling two 35 days to expiration in the Appropriate cycle and the strike is that 2750 Okay, so that's that's what we call the body of our butterfly now We need to buy the wings and to do that You're simply going to go to the strikes that you want in this case the way that we pick the different strikes So the way that we pick our wing width is we look at the expected move So in the next 35 days until these options expire the expected move in spx is plus or minus Call it 82 points. Okay, so we want to we want to buy our wings beyond the expected move So let's just call it 85 So what we'll do is we just count 85 points from the at the money so we can say 10 20 30 40 50 60 70 85 so that'd be the 28 35 and Then to buy that we simply click on the ask Now what happens is it defaults to doing the same number of contracts. So it's showing us buy two But remember we want to buy half as many as what we sold at the at the money So what we need to do simply highlight that click on quantity and kick that down to one You saw that change from B1 to B2 Okay, so now we're selling two at the money We're buying one of the wings 85 points away because that's beyond the expected move now. We need to buy another wing below the current price Okay, so we do the same thing count 85 so 10 20 30 40 50 60 70 85 that'd be the 26 65 We simply click on the ask and that populates a B1 and highlighted in green showing us buying one Contract. Okay, so we're selling two of the at the money and we're buying one wing below that price and one wing Above as far as price goes So that's how it's all set up Now that's one way to do it and the other way to do it if we clear that off Just like we've shown in our other tasty works Demo strategies is you can use that the strategy drop-down. Okay, so these tall go back and forth from long to short When you enter a butterfly, we are buying it. We're going long a butterfly. So we want to make sure that's on long You can toggle between put or call. We want to do call and then from the drop-down choose butterfly and So then once you do that it automatically puts that on your screen. However, it defaults to one strike out of the money Okay, so we don't want to do that, but what you can do is then simply click and drag So we can drag that down to the strikes that we want and let me make sure what those strikes were again 10 20 30 40 50 60 70 85 so it'd be this one here and then same thing here. We want to go 10 20 30 40 50 60 70 85 so we're 85 points away on either side Those are the strikes we want and then you can see down below that you've got your different statistics probability of profit 29% probability of making 50% is 95% I've got your theta your delta your max profit your max loss and Everything is set to go now if you like that you understand everything you've got here You can go ahead and shoot that into the broker to get filled or if you're a visual trader like myself I like to go over to the curve tab curve mode Make sure the analysis tab is clicked as well, and that'll bring up your visual of the butterfly Okay, so again, this is the body where we sold the two contracts and Then these are the wings where we bought one on both sides Now if you look at this and say man, I'd like my butterfly to be a little bit wider You can just click and drag these on Either side if you like or if you want it to be a little bit more narrow You can you can bring them in to have a little bit more of a narrow butterfly Okay, and so that gives you an idea of what that looks like you can scroll your mouse and look at the little flag to say what your P&L at expiration would be so the max risk on this side is 1500 and let's go ahead and lock this so they don't change 1565 to the downside and on the upside 2065 this is a little bit unbalanced because we were moving the strikes around and you can see at the very peak your max profit is $4,935 Obviously we're not we're not going to hold all the way to expiration But that gives you your visual representation of the butterfly. Of course you can pop out your window here and Change the different Expirations you can change the day that we're looking at so as we move through time you can see your P&L line If you can you can play with the volatility Obviously we want volatility to contract to benefit this so you can see as volatility goes down your profit line goes up And so you can play with that and get an idea of how the position will perform Based on price and volatility and time and all the stuff that goes into trading butterfly spreads So I hope that was helpful showing you how to set up a butterfly spread on tasty works