RUT October Iron Butterfly; what is next?
Yesterday was a flurry of activity with our open positions; the post-fed "hangover" necessitated activity on all three. At least one (SPY Iron Condor) benefitted and we were able to close for target; SPX was stopped out and RUT October position was adjusted.
Below is the current RUT position as of the close yesterday:
RUT October Iron Butterfly:
This position is now an Iron Condor with short puts at 1130 and short calls at the original strike of 1160.
Futures are trading down again as of this writing; so it appears that the bearish sentiment may continue today. The next adjustment to the downside will be if RUT reaches 1120. The adjustment calls for the put spreads to be rolled down another 20 points.
This adjustment will be done with one order; "BUY Condor" (all puts), as follows:
BUY October 1130 Put
SELL October 1080 Put
SELL October 1110 Put
BUY October 1060 Put.
After this second adjustment, depending on the debit to roll the puts, it may be necessary to roll down the non-threatened side (calls) for more credit in the trade. I personally would prefer not to take this action; I would rather see the position remain as a wide Iron Condor as long as there is enough credit to attain the target gain for the trade.
A trade update will be posted as appropriate.
In the meantime, stay keen on your risk management and trade carefully,