RUT June Iron Butterfly has reached the downside adjustment trigger point of 1100.
Today's selloff has put the June RUT position at the downside adjustment point of 1100.
A recap of the current position and suggested adjustment follows:
Original position opened Monday, May 16:
- SOLD RUT June 1110 Call, 24.10, credit.
- BOUGHT RUT June 1160 Call, 4.40 debit.
- SOLD RUT June 1110 Put, 22.00 credit.
- BOUGHT RUT June 1060 Put, 7.90 debit.
Order was filled as an "Iron Condor" for $33.80 net credit (all four legs).
Additional Order to cut Deltas on upside:
BOUGHT RUT June 1180 Call
Order for extra long call was filled for $1.60.
The guidelines call for the threatened side to be rolled 20 points if it appears that RUT will close below 1100. This can be accomplished with one order: "BUY Condor"; in this case all Puts. The adjustment will be:
BUY RUT June 1110 Put.
SELL RUT June 1060 Put.
SELL RUT June 1090 Put.
BUY RUT June 1040 Put.
This adjustment would put the short put strike at 1090, and the short call at the original 1110 strike. The resulting position will be a 20 point wide Iron Condor.
It is recommended to adjust the position before the close today if it appears that RUT will close below 1100. Actual fill prices will be posted when the adjustment is executed.
As always, stay keen on your risk management and trade carefully,