In this thread I will explain how an #IronFly which is in profit can be converted to a #Crown strategy.
I initiated a straddle in BankNifty yesterday at 48900 strike and later converted it to an IronFly by buying OTM wings
1) Initiated straddle at 48900 strike
2) Sensing bullish price action, bought CE wing
3) Before EOD, brought CE wing inside by 1 strike and bought PE wing at the same distance
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4) Bring both PE and CE wings inside by 3 strikes each to make ironfly free. The payoff will look like this.
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5)Initiate PE butterfly and CE butterfly on PUT side and Call side respectively.
5a) Buy 2 more lots 48600PE (the same strike of the buy wing of ironfly) Here we buy lesser qty than original fly qty (to make it look like a crown)
5b) Sell 4 lots 48400 PE
5c) Buy 2 lots 48200PE
Here notice the range of butterfly - it is lesser than the range available in IronFly. It has 3+3 strike ranges.
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6) Create Call butterfly with same rules
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7) If we create butterflies with same qty (in this example 3-6-3 instead 2-4-2) the structure will look like a Thrishul 😄😄. Try this out and post it here!!!