SPX May 4 Weekly Iron Butterfly and Put Credit Spread Positions Closed.
I mentioned in Thursday evening's article that I would exit the SPX May 4 weekly Iron Butterfly for a reduced target if the opportunity arose to eliminate the weekend risk. At approximately noon EST Friday, the position as illustrated below was +$117 before commissions. My closing order for $16.35 filled shortly thereafter. The gain on this position was $110, less $10 commissions. This gain represents 3.3% on the maximum margin, and 8% of the actual margin/risk. Given the current market conditions and intra-day movement, I felt it was wise risk management to exit the trade at this point.
SPX May 4 Iron Butterfly
Below is an update of 2013 results for the trade.
SPX Weekly Iron Butterfly Results
Below is a graph of the SPX May 4 weekly Put Credit Spread, just before our closing order filled to buy back the spread for .20. This position reached our target gain of $67.50, or 75% of the initial credit received ($90).
SPX May 4 Put Credit Spread
Our next trade entry date will be on Tuesday, May 21. If market conditions are suitable, we will enter the SPX Weekly Credit Spread, our "test kitchen" Iron Condor, and the RUT June monthly Iron Butterfly.
For those of you who may not be familiar with these trade guidelines, they can be found here: Link to Articles
Trade updates will be posted early next week.