SMB’s Options Training Program Presents:

1. SMB’s Options Training Program Presents: The Heart Friendly Butterfly

2. Disclaimer 1.       SMB TRAINING is NOT a Broker Dealer.  SMB TRAINING engages in trader education and training.  SMB TRAINING offers a number of products and services, both electronically (over the internet through Smbtraining.com) and in person.  Through Smbtraining.com, SMB TRAINING offers the “Virtual Trading Floor”, a community through which independent traders (subscribers), as well as T3 Trading Group, LLC traders, observe a virtual trading floor environment (as described below) for educational purposes.  SMB TRAINING also offers web-based, interactive training courses on demand. 2.       The seminars given by SMB TRAINING are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decisions you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs. 3.       This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by SMB TRAINING or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs. 4.       SMB Training and SMB Capital Management, LLC are separate but affiliated companies. 5.       T3 Trading Group, LLC is a Registered SEC Broker-Dealer and Member of the CBOE Stock Exchange (CBSX www.CBOE.com). All trading conducted by contributors on Virtual Trading Floor is done through T3 Trading Group, LLC. 7. The risk of loss in trading securities, options, futures and forex can be substantial. Customers must consider all relevant risk factors, including their own personal financial situation, before trading. Options involve risk and are not suitable for all investors. See the Options Disclosure Document: Characteristics and Risks of Standardized Options. Trading foreign exchange on margin carries a high level of risk, as well as its own unique risk factors. Please read the following risk disclosure before considering the trading of this product: Forex Risk Disclosure. Futures and forex accounts are not protected by the Securities Investor Protection Corporation (SIPC). 6. No Relevant Positions

3. Hypothetical Trades Disclaimer • Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown. All investments and trades carry risks.”

4. PART 2 TRADING THE HEART FRIENDLY BUTTERFLY IN A MARKET WHIPSAW

5. Not every market is a trending market • In any given year, there will be a number of months where the market does a “head fake” to the upside, after one upside adjustment but prior to the second upside adjustment (making the trade a complete condor) becoming a complete condor to the upside and then sells off. • These will not be your most profitable months, but they can be won.

6. Procedure in Whipsaw Months • If the market rallies and you have put on your first upside adjustment, but the rally ends and the market begins to sell off, then reverse the first upside adjustment selling it at a loss. This adjustment is done halfway between the original short strikes and the original downside expiration day breakeven. • This will return the position to the original iron butterfly, but a realized loss will have taken place as a result of the reversal of the upside adjustment.

7. Once back to the original iron butterfly position • The position is now adjusted as per the original guidelines (two upside adjustments, one downside adjustment), however, the breakeven points will most likely be closer as a result of the likely realized loss that occurred due to the adjustment reversal.

8. April, 2012

9. Adjustment Points Set

10. Taking note of downside midpoint

11. First Upside Roll Point

12. Analyze Graph after First Adjustment

13. Market Whipsaws—Upside Adjustment Reversed……

14. Returning the Position to the Original Iron Butterfly

15. Recalculating the adjustment points

16. Butterfly roll implemented at new downside breakeven point.

17. Post Roll the Position Becomes and Iron Condor

18. Analyze graph after downside roll

19. Seven Days Before Expiration

20. Trade Survives a Nasty Whipsaw

21. Whipsaw Months • They can happen at any time, and so you must be aware of the downside “whipsaw-only” adjustment points. • These will not be your best trades of the year, but, as we’ve seen they can be salvaged for a modest profit.