Recommended trade entry for Wednesday, October 22
Since last Wednesday's low of 1040, RUT has rebounded over 72 points. While still below the 200 EMA, I see very little resistance until 1150.
RUT 6 month chart:
As of this writing, RUT is at 1116.15, so I am recommending the center strike of the November Iron Butterfly be placed at 1120. Trade entry details are:
Expiration Date: Friday, November 21.
Recommended Trade Entry:
- SELL RUT November 1120 Calls
- BUY RUT November 1170 Calls
- SELL RUT November 1120 Puts
- BUY RUT November 1070 Puts
It is recommended to place the order as a single entry: SELL " Iron Condor".
Current mid price for all four legs: $33.70. We recommend trying to get filled for the mid, or slightly below.
Note that because this is a 50-point wide Iron Butterfly, the gross margin requirements in a Reg-T account is $5,000 per contract. Your broker will deduct this amount, less actual credit received, from your account when the order fills. However, it is recommended to allocate the entire $5,000 per contract as available capital for the position, to be certain enough funds are available to make any necessary adjustments.
Update will be posted with exact position details when the order is filled.
For those unfamiliar with the strategy, the trade management guidelines were updated on September 25, and can be found here:
Link to Articles
It is recommended that the guidelines be fully understood before entering the position.
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,