RUT March Iron Butterfly has reached the upside adjustment trigger of 1020.
Today's bullish action has brought RUT above the upside adjustment trigger of 1020.
A recap of the current position and suggested adjustment follows:
Original Position Opened February 18:
- SOLD RUT March 1010 Call, 25.70 credit.
- BOUGHT RUT March 1060 Call, 6.30 debit..
- SOLD RUT March 1010 Put, 29.80 credit.
- BOUGHT RUT March 960 Put, 13.00 debit.
Order was filled as an "Iron Condor" for $36.20 net credit (all four legs).
BOUGHT RUT March 1100 Call.
Call order was filled for $1.15 debit
The guidelines call for the threatened side to be rolled 20 points if it appears that RUT will close above 1020. This can be accomplished with one order: "BUY Condor"; in this case all Calls. The adjustment will be:
BUY RUT March 1010 Call.
SELL RUT March 1060 Call.
SELL RUT March 1030 Call.
BUY RUT March 1080 Call.
The current debit as of the close is 7.85 for the roll, but that will change depending on when the adjustment is made.
The adjusted position would put the short call strike at 1030, and the short put at the original 1010 strike, 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 1020. It is a trader's choice as to the timing of the adjustment. Actual fill prices will be posted when the adjustment is executed.
As always, stay keen on your risk management and trade carefully,