RUT March Iron Condor has reached the second upside adjustment trigger of 1030.
Earlier in the week it looked like we may have to adjust the RUT March position to the downside; now the bulls have taken RUT to the second upside adjustment trigger.
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
Upside Adjustment made February 25:
BOUGHT RUT March 1010 Call, 31.20 debit.
SOLD RUT March 1060 Call, 7.00 credit.
SOLD RUT March 1030 Call, 19.20 credit.
BOUGHT RUT March 1080 Call, 2.70 debit.
Net debit (all four legs): $7.70
The guidelines call for the threatened side to be rolled 20 points if it appears that RUT will close above 1030. This can be accomplished with one order: "BUY Condor"; in this case all Calls. The adjustment will be:
BUY RUT March 1030 Call.
SELL RUT March 1080 Call.
SELL RUT March 1050 Call.
BUY RUT March 1100 Call.
The current debit as of the close is 8.35 for the roll, but that will change depending on when the adjustment is made.
The adjusted position would put the short call strike at 1050, and the short put at the original 1010 strike, a 40 point wide Iron Condor.
It is recommended to adjust the position before the close today if it appears that RUT will close above 1030. It is a trader's choice as to the timing of the adjustment. Actual fill prices will be posted when the adjustment is executed. I wrote yesterday when the first adjustment was made that I am working temporarily from a remote office. Internet connection can be spotty, but I will post adjustment details as long as I have connectivity.
As always, stay keen on your risk management and trade carefully,