RUT December Iron Condor is at the second upside adjustment trigger point.
RUT continues to rally after the FOMC minutes were released, and has now reached the second upside adjustment trigger point of 1160.
A recap of the current position and suggested adjustment follows:
Original Position Entered November 16:
- SOLD RUT December 1140 Call, 29.60 credit.
- BOUGHT RUT December 1190 Call, 8.00 debit.
- SOLD RUT December 1140 Put, 26.70 credit.
- BOUGHT RUT December 1090 Put, 11.60 debit.
Order was filled as an "Iron Condor" for $36.70 net credit (all four legs).
Additional Order to cut Deltas on upside:
BOUGHT RUT November 1235 Call
Order for extra long call was filled for $1.30.
Upside Adjustment November 17:
BOUGHT RUT December 1140 Call, 32.90 debit.
SOLD RUT December 1190 Call, 8.80 credit.
SOLD RUT December 1160 Call, 21.30 credit.
BOUGHT RUT December 1210 Call, 4.10 debit.
Net debit (all four legs): $6.90
This position is currently a 20 point wide Iron Condor, with the short call strike at 1160, and the short put at the original 1140 strike.
The guidelines call for the threatened side to be rolled 20 points if RUT reaches either short strike. However, when the first upside adjustment was made and published, I mentioned that because we have the extra long call, we may be able to wait a bit before making the second upside adjustment. RUT has now reached 1164, so it is recommended to adjust once again.
This can be accomplished with one order: "BUY Condor"; in this case all Calls. The adjustment will be:
BUY RUT December 1160 Call.
SELL RUT December 1210 Call.
SELL RUT December 1180 Call.
BUY RUT December 1230 Call.
This adjustment will put the short call strike at 1180, and the short put at the original 1140 strike. The resulting position will be a 40 point wide Iron Condor.
It is recommended to adjust the position before the close today if it appears that RUT will close above 1160. Actual fill prices will be posted if the adjustment is executed.
As always, stay keen on your risk management and trade carefully,