Friday end-of-day recap of the current position. As of the close today, the graph below shows the position for the March5 cycle.
SPX March5 Weekly Iron Butterfly
SPX closed Friday at 1556.89.
The position is currently -$132.39, or -4.4% of the maximum margin of $3,000.
The implied volatility of the March5 option chain has increased from 12.59 at time of entry Thursday to 13.80 at the close Friday. This increase, as well as the price of SPX moving away from our center strike of 1550, is contributing to the current unrealized loss on this position. A decrease in volatility, along with the price of SPX moving closer to our center strike, could bring the position closer to target.
Adjustment trigger points:
- Upside if SPX reaches 1560: Call spreads will be rolled up 20 points to -1570/+1600
- Downside if SPX reaches 1540: Put spreads will be rolled down 20 points to -1530/+1500
Closing order is in for $15.45 debit, which will be target gain of $150 after commissions.
An update on this position will be posted Monday.
In closing, I would like to say once again that your feedback is important to me, and I encourage you to email me with any questions. This may be a strategy different than many of you are accustomed to, and it's important to understand any new trade thoroughly in order to attain positive results. I want to help you achieve those results.
As always, stay keen on your risk management and trade carefully,