Weekly Iron Butterfly Backtest (Part 7)
Posted by Mark on July 1, 2013 at 10:40 | Last modified: August 2, 2013 10:52In this blog series, I’m backtesting the weekly option trade described here.
At inception on Week #6, the trade looked like this:
The P/L ranged from -$144 to -$837 on this day.
On Day #2, max loss was hit:
The market only had to rally 14 points to force a 26% loss on the initial margin of $4,311.
In the first six weeks of this backtest, we have seen three wins and three losses. That only tells half the story, however. The average win has been $515 versus an average loss of $1,032. That, my friends, is a recipe for disaster!
Time will tell whether these early tendencies persist.
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