The strategy demonstrates how traders can capture upside in META while protecting capital, showcasing the practical value of broken‑wing butterflies in choppy markets.
In the video, Simpler Trading’s director of risk tolerance, Alison Nostrander, walks viewers through a high‑probability options setup on Meta Platforms (META), focusing on a debit broken‑wing butterfly that expires in May.
She points out that META’s daily chart remains choppy, but the weekly 100‑day SMA has resumed as a reliable support level, and a weekly squeeze is forming. A bullish divergent bar on the weekly timeframe carries a 9‑out‑of‑10 follow‑through probability, while the monthly chart shows a consolidation that could produce a bullish squeeze targeting $744 within the next three bars.
Nostrander emphasizes the trade’s risk‑reward profile: a $110 debit for a maximum profit of $8.90 per contract, with a breakeven around $7.40 and a fallback profit of $3.90 if the price settles near $1.20. She also sets a “line in the sand” at a close below $630‑$625, which would invalidate the bullish bias.
For options traders, the broken‑wing butterfly offers asymmetric upside while limiting downside, making it suitable for small accounts seeking high reward with controlled risk. The setup illustrates how multi‑timeframe analysis and divergence signals can guide entry points in a volatile market.
Comments
Want to join the conversation?
Loading comments...