You have a significant edge over break-even at every profit target. Even on your worst days, the math is working for you. The 10% target requires only a 45% win rate to break even, but historically wins 70% of the time.
🎯 Daily Scenarios (4 Positions @ 70% WR, 10% TP)
Excellent Day
4 Wins / 0 Losses
+$370
24% probability
Good Day
3 Wins / 1 Loss
+$202.50
41% probability
Break-Even Day
2 Wins / 2 Losses
+$35
26% probability
Bad Day
1 Win / 3 Losses
-$132.50
8% probability
Worst Day
0 Wins / 4 Losses
-$300
1% probability
Expected Daily P/L
+$169
65% of days are profitable
🔄 Why Re-Center Every 15 Points?
✔
Maximum Theta Decay - Each new fly starts at peak time decay. Off-center flies lose theta efficiency.
✔
Independent Probability Events - Each butterfly is a separate 70% win chance. P(at least 1 winner from 4 flies) = 99.2%
✔
Oscillation Capture - Choppy days let multiple flies hit profit targets as price swings through their centers.
✔
Trend Day Protection - Even if price trends hard, your losses are capped at ~$300 (4 flies x $75).
✔
Always ATM - You stay in the highest gamma/premium zone where butterflies are most efficient.
⚠ Risk Management
Metric
Value
Max Daily Loss (4 flies)
-$300
Max Weekly Loss (worst case)
-$1,500
Expected Monthly Profit
+$3,380 to +$6,441
Risk/Reward per Trade
1:12.3
Probability of Worst Day
1%
⏰ Afternoon Strategy (After 2:00 PM ET)
Why Afternoons Are Different
As expiration approaches, theta decay accelerates exponentially. This means smaller profit targets get hit faster - often in minutes instead of hours. Use a tighter setup to capitalize on rapid time decay.
Time Window
Credit
Take Profit
Win $
Time to Fill
Win Rate
9:30 - 11:00 AM
$925
10%
$92.50
30-60 min
70%
11:00 AM - 2:00 PM
$850
5-10%
$42-85
15-30 min
75-80%
2:00 - 3:00 PM
$850
5%
$42.50
5-15 min
80%+
3:00 - 3:45 PM
$800
5%
$40
1-5 min
80%+
After 3:45 PM
Consider sitting out - gamma risk too high
Afternoon TP
5%
Stop Loss
$75
Expected WR
80%+
Time in Trade
1-15 min
Afternoon Edge
Pros: 5% profit target hits fast (minutes, not hours). Less time exposed to adverse moves. Quick in/out = less stress.
Cons: Gamma spikes mean wrong moves hit stops instantly. Need to be more selective on entries.
📊 Contract Sizing: 5 Contracts x 4 Flies
Win per Fly
$212.50
Loss per Fly
$375
Expected Daily
+$285
Days to Pass
~6 days
Daily Outcome
Probability
P/L
Hits $250?
4 Wins / 0 Losses
41%
+$850
Yes
3 Wins / 1 Loss
41%
+$262.50
Yes
2 Wins / 2 Losses
15%
-$325
No
1 Win / 3 Losses
3%
-$912.50
No
0 Wins / 4 Losses
0.16%
-$1,500
Blow-up
Days Hitting $250+ Target
82%
Both 4W and 3W days qualify for the challenge
Blow-Up Risk
Probability per day
0.16% (1 in 625 days)
Chance before passing (~6 days)
~1%
Cost if it happens
$99 fee + ~$1,250 lost progress
🏃 Bootcamp Mode (5-Day Challenge)
The Plan
5 contracts per fly | Target $50/contract ($250 total)
One winning trade = done for the day
If first fly loses, re-center and try once more
Contracts
5
Win Target
$250
Loss (at $75 stop)
$375
Win Rate
80%
Scenario
Result
Next Step
First fly wins
+$250
Done for the day
First fly loses, second wins
-$125
Small loss, try tomorrow
Both flies lose
-$750
Stop for day (near limit)
Expected Value Per Trade
+$125
80% × $250 - 20% × $375 = +$125
📊 Projection Calculator
Win Rate (%)
Contracts
Profit/Contract ($)
Stop/Contract ($)
Win Amount
$250
Loss Amount
$375
EV per Trade
+$125
Loss Setback
1.5 days
20-Day Projection (Monte Carlo Simulation)
Day
Result
Daily P/L
Cumulative
Stable Calculation (Pure Math)
EV per Trade
+$125
Expected Wins (20 days)
16
Expected Losses (20 days)
4
Expected 20-Day Total
+$2,500
Always the same for given inputs. This is your long-term average.
Monte Carlo (Random Simulation)
This Run's Result
+$2,500
Winning Days
16
Losing Days
4
Max Drawdown
-$375
Varies each run. Shows what could happen with luck/bad luck.
The Bottom Line
Bootcamp: 5 Contracts, $50/contract, One and Done
Win = +$250 (goal met, stop trading)
Loss = -$375 (re-center, try once more)
80% win rate | +$125 EV per trade
Loss only sets back 1.5 days - plenty of recovery room
Disclaimer: This model is based on historical TastyTrade research data. Past performance does not guarantee future results. Options trading involves significant risk of loss and is not suitable for all investors. Always paper trade or start small to validate the strategy works for your trading style. The win rates and profit expectations shown are based on backtested data and actual results may vary.