RUT July Iron Butterfly Adjusted to Downside.

The downside adjustment for the July position filled for 6.00. Some traders may choose to wait until later in the day to make the adjustment depending on market opinion. However, I was a bit concerned about additional volatility heading into the close today with the RUT rebalancing so decided to move forward with the adjustment. Adjustment details are:

BOUGHT RUT July 1290 Put, 25.10 debit.

SOLD RUT July 1240 Put, 8.00 credit.

SOLD RUT July 1270 Put, 16.10 credit.

BOUGHT July 1220 Put, 5.00 debit.

Net debit (all four legs): $6.00 (mid price was 5.80 when the order filled)

RUT was trading at approximately 1274.71 when the order filled.

The graph of the adjusted position is below:

RUT July Iron Butterfly after downside adjustment:

The position summary after the adjustment is as follows:

SHORT RUT July 1290 Call

LONG RUT July 1340 Call

SHORT July 1270 Put

LONG July 1220 Put

The position is now a 20 point wide Iron Condor.

The next adjustment trigger point will be at either short strike. The trade guidelines were most recently published on October 22, 2014, and can be found here: Link to Articles

Trade updates will be posted as appropriate.

As always, stay keen on your risk management and trade carefully,

Dot Hazlin