Backspreads, Diagonals and Butterflies – Advanced Options Strategies by Hari Swaminathan Free Download – Includes Verified Content:
Course Description
THIS ADVANCED OPTIONS COURSE COVERS THREE STRATEGIES: BACKSPREADS, DIAGONALS, AND BUTTERFLY SPREADS
SECTION I – BACKSPREADS AND RATIO SPREADS
Backspreads and Ratio Spreads involve trading an uneven number of long and short option contracts. When there are more long options than short, it’s called a Backspread. When there are more short options than long, it’s known as a Ratio Spread—which carries unlimited risk on one side due to excess short options. This course, part of the Busy Professional Series, focuses on constructing and managing Backspreads effectively using various strike combinations and long-to-short ratios. Ratio spreads are not recommended due to their risk profile.
What you will master
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The underlying principles behind Backspreads and Ratio spreads
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Innovative ways to set up Backspreads
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How to interpret the Greeks within a Backspread
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Understanding the so-called “Valley of Death” and how to avoid it
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Why Backspreads are ideal for volatility-based trading
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Why Ratio spreads are risk-heavy and best avoided
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How Backspreads offer flexible income opportunities for busy traders
SECTION II – DIAGONALS AND DOUBLE DIAGONALS
Diagonal spreads are a more advanced form of the Calendar spread, offering reduced Vega exposure but introducing a Delta bias. It’s recommended that you’re already confident with Calendar spreads before tackling Diagonals. Though structurally similar, Diagonals are more complex and involve distinct risks and rewards. One of the most effective adjustments is converting to a Double Diagonal on the weaker leg—covered thoroughly in this section. You’ll also benefit from faster Theta decay, but with increased risk.
What you will master
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What Diagonals are and how they compare to Calendar spreads
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Why Diagonals are more complex to adjust
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Standard adjustments used for Diagonal spreads
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How Double Diagonals can expand both your profit range and maximum payout area
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Why Diagonals generally provide better Theta decay
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How Diagonals help reduce Vega impact
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The reasons Diagonals involve greater risk than Calendars
SECTION III – BUTTERFLY SPREADS
Butterfly spreads are known for being low-risk, high-reward, but they also come with low probability of success. These setups involve three strike prices and a mix of long and short options, making them a bit tricky to manage. However, when they do work, the payoff can be substantial—often at a low cost, and sometimes with a net credit. Butterflies are best used selectively, not as a regular income strategy, but rather as tools for hedging or exploiting specific market events such as earnings announcements. These advanced use cases are covered in detail.
What you will master
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Why the Butterfly spread offers low risk with the potential for high reward
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The real-world success rate and potential returns from Butterfly trades
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Effective ways to adjust and manage Butterfly positions
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Why this is considered a speculative strategy
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Why it’s not suited as a consistent monthly income trade
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When Butterfly trades are most effective—such as during earnings reports
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How to use Butterflies to hedge losing trades in Iron Condors or Credit Spreads
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When and how Butterflies hit their maximum profit
What are the requirements?
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A working knowledge of options basics: Calls, Puts, and Vertical Spreads
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Familiarity with trade and spread adjustments
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Prior understanding of Calendar spreads (for Diagonals)
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Basic knowledge of Credit spreads (for Butterfly applications)
What am I going to get from this course?
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Deep dive into three advanced options strategies: Backspreads, Diagonals, and Butterfly spreads
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Learn creative ways to construct Backspreads for both income and volatility setups
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Discover how Diagonals differ from Calendars and why they’re seen as exotic trades
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Master the unique setup and timing for Butterfly spreads
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Explore practical applications of Butterfly trades for hedging and recovery from losing positions
What is the target audience?
Options traders who already understand the basics and are ready to move into more advanced strategy execution.
