RUT August Iron Butterfly has reached the downside adjustment point, but is not in need of immediate adjustment today. It is a trader's choice whether to adjust today or tomorrow.

While today's selloff has caused RUT to reach the downside adjustment point, it is not being adjusted today. A recap of the current position and status is below::

Original Position entered July 20:

- SOLD RUT August 1260 Call, 19.55 credit.

- BOUGHT RUT August 1310 Call, 1.90 debit.

- SOLD RUT August 1260 Put, 20.90 credit.

- BOUGHT August 1210 Put, 7.40 debit.

Order was filled as an "Iron Condor" for $31.15 net credit (all four legs). RUT was trading at approximately 1259.50 when the order filled.

Additional Order to cut Deltas on upside:

BOUGHT RUT August 1320 Call

Order for extra long call was filled for $1.10.

The risk graph of the current position is below:

RUT August Iron Butterfly:

When the position was opened, I posted that the downside adjustment at the time the trigger was reached would depend on the position status at the time. As of this writing, the RUT Iron Butterfly is currently at a gain of +$132. The downside expiration breakeven is at 1229, so we will hold off making the adjustment today. For anyone who cannot be at the computer to monitor the position tomorrow, or feels uncomfortable with the position, it is perfectly fine to make the adjustment today. Remember, trading is an art, not a science, and personal trading style is an important element.

If RUT does not pull back above 1250 tomorrow, it is recommended to make the downside adjustment, which is to roll the put spreads down 20 points. This can be accomplished with one order: "BUY Condor"; in this case all Puts. The adjustment will be:

BUY RUT August 1260 Put.

SELL RUT August 1210 Put.

SELL RUT August 1240 Put.

BUY RUT August 1190 Put.

The adjusted position would put the short put strike at 1240, and the short call at the original strike of 1260. The position after adjusting will be a 20 point wide Iron Condor.

It is recommended to adjust the position before the close on Friday if it appears that RUT will close below 1250. Actual fill prices will be posted if the adjustment is executed.

As always, stay keen on your risk management and trade carefully,

Dot Hazlin