Butterfly spread strategies give traders powerful ways to engage the futures and options markets. Featuring applications for trading both bullish and bearish opinions, these types of spreads are ideal for limiting risk while pursuing nearly any financial goal. However, be forewarned―the market doesn’t hand out free lunches, and spread trading is no exception.
Sometimes, when I am looking at a market technically, checking out contracts alone can be a bit blinding. The big moves, exaggerated by high frequency trading and speculative froth can be a bit misleading.