SPX March5 Weekly Iron Butterfly Exit Order Filled. This morning's open brought SPX to our upside adjustment point shortly after the open. However, following the guidelines to wait at least 45 minutes to 1 hour before making any adjustment, patience was in order. At 10:30 EST, SPX was hovering at the adjustment trigger price of 1560, but the position was oscillating between a very small loss to a small gain, so no immediate action was taken. In looking at the charts, it appeared to me that SPX was beginning to break down off the morning's high (1564.91 at 10:10 EST)
As always, an exit order was in to close the position for a debit of $15.45. At 10:45 am, with SPX at 1557.82, the closing order executed. A large amount of decay and volatility came out of the SPX March5 options during the first hour. This, along with SPX moving back towards our center strike, helped the position reach target gain.
This resulted in a net gain of $150, or 5% maximum allocated capital. This was our target for this position.
Below is an update of 2013 results for the trade.
SPX Weekly Iron Butterfly Results
Next trade entry for the April1 cycle will be Thursday, March 28. Market is closed on Friday, March 29. Recommendations for trade entry will be posted Wednesday.
In closing, I want to mention again that as with any new strategy, this position should be back tested thoroughly, and paper trade it before putting on a live position. Since I started posting this trade, we have not had to make any adjustments. It is recommended that until we go through some adjustments, to keep paper trading, or back test through some adjustments to get a good feel for how the trade is managed.
Have a great trading week, everyone.