January RUT Iron Butterfly order filled.
Order executed for this new position:
- SELL RUT January 1180 Calls.
- BUY RUT January 1230 Calls.
- SELL RUT January 1180 Puts.
- BUY RUT January 1130 Puts.
Order was filled as an "Iron Condor" for $35.15 net credit (all four legs). RUT was trading at approximately 1182 when the order filled.
BUY RUT January 1260 Call.
Order for extra long call was filled for $1.70.
Margin/Risk is calculated by the width of the wings ($5,000), less credit received, plus the cost of the extra long call.
Margin/Risk for this trade: $1,655.
Target Gain: 5% of the gross margin ($250/contract)
Max loss: 10% of the gross margin ($500/contract)
Below is the risk graph of this week's position as shown on my broker's platform:
RUT January Iron Butterfly:
The adjustment trigger points for this position are if RUT moves up or down 10 points from the center of the Iron Butterfly. Adjustment trigger on the call side would be if RUT reaches 1190. With some resistance at 1190 and since we have the extra long call, we can be a little patient with the adjustment to see if a break above 1190 looks like it will hold. The downside adjustment would be at approximately 1170, depending on market conditions and position status at the time the trigger is reached.
For those unfamiliar with the strategy, the trade management guidelines were updated on September 4, and can be found here:
Link to Articles
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,