RUT August Iron Butterfly Adjusted to Downside
The downside adjustment for the September RUT position filled for $6.00 debit, with RUT trading a bit over 1222. It didn't look like a bounce was forthcoming, so I decided to move ahead with the adjustment instead of waiting until this afternoon. Some may choose to wait until later in the day, depending on your market opinion. Adjustment details are below:
BOUGHT RUT September 1240 Put, 30.40 debit.
SOLD RUT September 1190 Put, 11.60 credit.
SOLD RUT September 1220 Put, 20.20 credit.
BOUGHT RUT September 1170 Put, 7.40 debit.
Net debit (all four legs): $6.00
The graph of the adjusted position is below:
RUT September position after downside adjustment:
The position summary after the adjustment is as follows:
SHORT September 1240 Call
LONG September 1290 Call
SHORT September 1220 Put
LONG September 1170 Put
LONG September 1300 Call bought at trade entry to cut position delta.
The position is now a 20 point wide Iron Condor.
The next adjustment trigger point will be either short strike, depending on overall position status and market conditions.
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,