New Trade Entry. : SPX Weekly Iron Butterfly for the May 1 Cycle.
The market cooperated with us today and was within our guidelines to enter the new weekly cycle. Below is this week's position:
SPX Position Entered Friday, April 26
SPX May 1 SPX Iron Butterfly at time of entry
May 1 SPX Iron Butterfly centered at 1585
Time of entry: 3:00 pm Eastern. SPX price: 1,583.04 at entry; VIX at 13.71
Call spreads: -1585/+1615
Put spreads: -1585/+1555
Credit received: $15.70
Maximum margin/risk is $3,000 (width of wings)
Buying power reduction: $1,430 ($3,000 less credit of $1,570). This leaves $1,570 (less commissions) for adjustments.
Adjustment trigger points:
- Upside if SPX reaches 1595: Call spreads will be rolled up 20 points
- Downside if SPX reaches 1575: Put spreads will be rolled down 20 points
Again, I want to stress to everyone in this trade to review the article posted April 6 titled Gaps? Whipsaw? which contains some very important, additional guidelines to manage this trade.
Closing order is in to close the position for a $14.10 debit, which will be a net gain of $150 after commissions.
Trade will be exited if max loss of $300 is reached.
I will post an update as the trade progresses.
As always, stay keen on your risk management and trade carefully.