It is recommended to adjust RUT Iron Butterfly.
RUT continues to march higher; the April Iron Butterfly is at the upside adjustment point. Below are the specifics of the position and recommended adjustment:
- SOLD RUT April 1250 Calls, 20.70.
- BOUGHT RUT April 1300 Calls, 2.60
- SOLD RUT April 1250 Puts, 19.80
- BOUGHT RUT April 1200 Puts, 7.00
Order was filled as an "Iron Condor" for $30.90 net credit (all four legs).
Additional Order to Cut Negative Deltas on Upside:
- BOUGHT RUT April 1310 Call
Order for extra long call was filled for $1.35.
The guidelines call for the threatened side to be rolled 20 points if RUT moves 10 points in either direction from the center of the position. This can be accomplished with one order: "BUY Condor"; in this case all Calls. The adjustment will be:
BUY RUT April 1250 Call.
SELL RUT April 1300 Call.
SELL RUT April 1270 Call.
BUY RUT April 1320 Call.
The adjusted position will now put the short call strike at 1270, and the short put at the original strike of 1250, a 20 point wide Iron Condor.
It is recommended to adjust the position before the close today if it appears that RUT will close above 1260. The current debit for the adjustment is $10.20, but this will change depending on when the adjustment is made.
Some traders may take the stance that "this can't keep going up"â€¦..however, I will abide by the guidelines and manage the position as they dictate.
Actual fill prices will be posted if the adjustment is executed.
As always, stay keen on your risk management and trade carefully,