RUT April Iron Butterfly Adjusted to Downside.
The downside adjustment for the April position filled for 5.55. Adjustment details are:
BOUGHT RUT April 1250 Put, 23.75 debit.
SOLD RUT April 1200 Put, 7.70 credit.
SOLD RUT April 1230 Put, 15.40 credit.
BOUGHT April 1180 Put, 4.90 debit.
Net debit (all four legs): $5.55
RUT was trading at approximately 1239.21 when the order filled.
The graph of the adjusted position is below:
RUT April Iron Butterfly after downside adjustment:
The position summary after the adjustment is as follows:
SHORT April 1270 Call
LONG April 1320 Call
SHORT April 1230 Put
LONG April 1180 Put
The position is now a 40 point wide Iron Condor.
The next adjustment trigger point will be at either short strike. Since this position has already been adjusted twice, we will evaluate the status if RUT approaches either short strike to determine if it is wise risk management to make a third adjustment, or recommend to exit the position.
The trade guidelines were most recently published on October 22, 2014, 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,