It is recommended to adjust RUT Iron Butterfly.
RUT continues to march higher; the December Iron Butterfly is at the upside adjustment point after just one day in the trade. Below are the specifics of the position and recommended adjustment:
Original Position Opened November 16:
- SOLD RUT December 1140 Call, 29.60 credit.
- BOUGHT RUT December 1190 Call, 8.00 debit.
- SOLD RUT December 1140 Put, 26.70 credit.
- BOUGHT RUT December 1090 Put, 11.60 debit.
Order was filled as an "Iron Condor" for $36.70 net credit (all four legs).
Additional Order to cut Deltas on upside:
BOUGHT RUT November 1235 Call
Order for extra long call was filled for $1.30.
The guidelines call for the threatened side to be rolled 20 points once RUT moves 10 points 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 December 1140 Call.
SELL RUT December 1190 Call.
SELL RUT December 1160 Call.
BUY RUT December 1210 Call.
The adjusted position will now put the short call strike at 1160, and the short put at the original strike of 1140, a 20 point wide Iron Condor.
It is recommended to adjust the position today if RUT remains above 1150.
Actual fill prices will be posted if the adjustment is executed.
As always, stay keen on your risk management and trade carefully,