New Trade Entry: RUT Monthly Iron Butterfly for the May Cycle. RUT settled within our entry guidelines today, so the new May position was entered.

RUT Position Entered Thursday, April 18. Below is a graph of the position shortly after entry.


RUT May Iron Butterfly at time of entry




May RUT Iron Butterfly centered at 900

Time of entry: 3:10 pm Eastern. RUT price: 899.05 at entry; RVX at 23.36

Call spreads: -900/+950

Put spreads: -900/+850

Credit received: $32.00

Maximum margin/risk is $5,000 (width of wings)

Buying power reduction: $1,800 ($5,000 less credit of $3,200). This leaves $3,200 (less commissions) for adjustments.

Adjustment trigger points:

- Upside if RUT reaches 910: Call spreads will be rolled up 20 points

- Downside if RUT reaches 890: Put spreads will be rolled down 20 points

Exit plan:

Target gain: $250, or 5% of maximum allocated margin.

Trade will be exited if max loss of $500 is reached.

I will post an update as the trade progresses.

With regards to the SPX Weekly Iron Butterfly for April 4 cycle, I am still not recommending an entry this cycle. As I mentioned last night the last week has been quite volatile, and I feel the best risk management is to sit on the sidelines for this week and look forward to the next entry for the May 1 cycle. This is a great opportunity to paper trade, or continue to back test, the weekly trade until the next entry date.

As always, stay keen on your risk management and trade carefully.

Happy Trading,

Dot Hazlin