Bearish Butterfly - possible good entry for short position
Possible good entry for short position (small time frame 1H) - Risk/Reward Ration 3.53
The bear butterfly spread should be considered when you expect that a security will fall in price within a certain period of time, and you have a good idea of what price it will fall to. It allows you to make a good return if your prediction is accurate, while only exposing you to a limited amount of risk.
The upfront cost is relatively low, so it's a good strategy if you have limited investment capital. The potential profits are limited though, so it isn't ideal if you believe that the price of the security could possibly fall substantially in price.
This is just my opinion. Good luck!
The bear butterfly spread should be considered when you expect that a security will fall in price within a certain period of time, and you have a good idea of what price it will fall to. It allows you to make a good return if your prediction is accurate, while only exposing you to a limited amount of risk.
The upfront cost is relatively low, so it's a good strategy if you have limited investment capital. The potential profits are limited though, so it isn't ideal if you believe that the price of the security could possibly fall substantially in price.
This is just my opinion. Good luck!