Core Income Butterfly Options Trade Down Day – Adjustment Needed? (Video)


Just a couple of short weeks ago as we were getting ready for the Santa Claus rally that wasn’t, the February CIB almost needed an upside adjustment.  (See this video)  After falling short of the upside adjustment point, the market traded lower the following week and tumbled another 2.3% today.  In the video below we take a look at the market following the sell-off and what the position looks like today.  At this point, the market is still in the 1100-1200 range and nothing has changed even though things were a little red.  Enjoy:

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  • I enjoyed the video and your insights into RUT. RUT became oversold this morning according to my proprietary signal. However, it bounced back so quickly that I decided to wait a bit and it never traded near 1100 again. I also was not able to see any options info for RUT Mar5 on ToS. I was thinking of selling RUT Mar 31st 910/900 cps for $0.70 credit but the late afternoon rally shut the window of opportunity. Thanks for listing me on the ‘Sites I Follow’ section.

    • Dan

      Hey Jonathan, you’re excellent about following your OB/OS signals. I saw your tweet go out about the SPX spread, which I think was also related to the oversold market. It does seem like there are usually more SPX options available than RUT.

      Happy to list you in the sites I follow. I really enjoy reading your market commentary. Even though I don’t trade the same style, I always learn something.