RUT January Iron Butterfly Closed for Target
This morning's quiet start to the day allowed us to exit the RUT January Iron Butterfly for target. A summary of the position and closing details follow:
Original Position entered December 17
- SOLD RUT January 1150 Call, 22.80 credit.
- BOUGHT RUT January 1200 Call, 4.10 debit.
- SOLD RUT January 1150 Put, 24.00 credit.
- BOUGHT RUT January 1100 Put, 9.10 debit.
Order was filled as an "Iron Condor" for $33.60 net credit (all four legs).
Additional Order to cut Deltas on upside:
BOUGHT RUT January1235 Call
Debit for long call: $.95.
Margin/Risk is calculated by the width of the wings ($5,000), less credit received, plus the cost of the extra long call.
Margin/Risk for this trade: $1,735.
Target Gain: 5% of the gross margin ($250/contract)
Max loss: 10% of the gross margin ($500/contract)
On Friday, the day after entry, the position was adjusted to the downside as follows:
BOUGHT RUT January 1150 Put, 32.40 debit.
SOLD RUT January 1100 Put, 12.60 credit.
SOLD RUT January 1130 Put, 22.60 credit.
BOUGHT RUT January 1080 1100 Put, 8.40 debit.
Net debit (all four legs): $5.60
Position closed December 21:
BOUGHT RUT January 1150 Call, 9.90 Debit
SOLD RUT January 1200 Call, 1.15 Credit
BOUGHT RUT January 1130 Put, 25.05 Debit
SOLD RUT January 1080 Call, 9.10 Credit
Net Debit (all four legs): $24.70
SOLD RUT January 1235 Call, .25 Credit
This closing resulted in a gain of $260, 5% of the gross margin and target for the trade.
As always, stay keen on your risk management and trade carefully,