The RUT November position is at the next upside adjustment point; it is recommended to either adjust the position once again, or exit if the pre-set max loss of 10% is reached today.
RUT moved up over 31 points yesterday to close at 1149.45 or +2.86%. Futures are flat as of this writing "pre-FOMC". The meeting announcement is at 2 pm this afternoon so it's anyone's guess what will happen. Some analysts are saying the the move yesterday had the Fed decision built in, so it "could" be a sell-the-news event.
The position will be watched very carefully this morning; and will be closed if the pre-set max loss of 10% is reached ($500). If the position remains open, and RUT does not pull back below 1140 today, it is recommended to make the second upside adjustment.
A recap of the original position and adjustments are below:
SOLD RUT November 1120 Call.
BOUGHT RUT November 1170 Call.
SOLD RUT November 1120 Put.
BOUGHT November 1070 Put.
Net Credit (all four legs): 33.60
First upside adjustment made October 28:
BOUGHT RUT November 1120 Calls
SOLD RUT November 1170 Calls
SOLD RUT November 1140 Calls
BOUGHT RUT November 1190 Calls
Net Debit: (all four legs): 8.55
The next adjustment is to roll the call side another 20 points. This can be accomplished with one order: "BUY Condor"; in this case all CALLS.
The adjustment would be:
BUY RUT November 1140 Call.
SELL RUT November 1190 Call.
SELL RUT November 1160 Call.
BUY RUT November 1210 Call.
The adjusted position will now put the short call strike at 1160, and the short put at the original strike of 1120, so the new position will be a 40-point wide Iron Condor.
The current debit to adjust the position is $8.60, but this will most likely change throughout the day. It is recommended to adjust before the end of the day today unless RUT pulls back below 1140. Again, the position will be closed if the max loss of 5% is reached. Actual fill price for the adjustment or position closing will be posted.
As always, stay keen on your risk management and trade carefully,