As of this writing, RUT appears to be within our guidelines for entry later today. I plan to wait until the last hour before entering the position. Please remember that if RUT moves +/- one standard deviation (10 points), do not enter the trade.
Below is an additional price range for entry today:
2) If the price of RUT is between 895 - 904.99 enter the following trade with the Iron Butterfly centered at 900:
Order Entry: SELL (1) IRON CONDOR.
SELL 1 contract May 900 CALL
BUY 1 contract May 950 CALL
SELL 1 contract May 900 PUT
BUY 1 contract May 850 PUT
CREDIT: As of this writing, credit for this entry is $31.65. This will likely be different as the day progresses. Over the past several months, credits have ranged from $27.00 - $33.00
Position Adjustment Trigger Points (if RUT moves +/- 10 points from center strike). Note: Try to wait 45 minutes - 1 hour after market opens before making any adjustments. Watch key levels of support or resistance before adjusting. If RUT is at, or hovering around, support and resistance levels, it may be prudent to wait a bit longer to adjust. Many times the first hour's price movement is not reliable. My personal preference is to wait until the end of the day whenever possible before adjusting.
- Upside adjustment if RUT reaches 910.
Roll Call spreads 20 points:
Order entry for adjustment: BUY (1) CONDOR using all CALLS.
BUY 1 contract May 900 CALL
SELL 1 contract May 950 CALL
SELL 1 contract May 920 CALL
BUY 1 contract May 970 CALL
- Downside adjustment if RUT reaches 890.
Roll Put spreads 20 points:
Order entry for adjustment: BUY (1) CONDOR using all PUTS.
BUY 1 contract May 900 PUT
SELL 1 contract May 850 PUT
SELL 1 contract May 880 PUT
BUY 1 contract May 830 PUT
A trade update will be posted this evening.